The Second District Court of Appeal issued an opinion on February 6, 2015, that affects homeowners involved in disputes with FIGA (Florida Insurance Guaranty Association). The opinion, FIGA v. Waters, 2D13-4455 (Fla. 2d DCA February 6, 2015), is nonfinal until the time expires to file for rehearing, but considering that it is consistent with prior opinions, it is unlikely to be overturned short of an appeal to the Florida Supreme Court. The Second DCA essentially reiterated that the date of insolvency governs the version of the FIGA statute applied. As the events in this case involved a Homewise Insurance Company insolvency, the 2011 definition of “covered claim” was determined by the Court to be applicable. This is significant because the 2011 definition of “covered claim” prohibits “FIGA from paying an insured directly for a sinkhole loss.” Consequently, the appraisal portion of the policy was held to be inapplicable as it was at odds with the prohibition against paying homeowners directly. Regardless of your belief about this statute, the courts in the 1st and 2nd DCAs appear unwilling to allow a homeowner in a FIGA sinkhole case to recover money directly. So, what happens if a jury returns a verdict greater than the limits of FIGA’s statutory liability? Is the homeowner stuck doing a partial repair – one which could potentially put the home in an even worse position? There are definitely some philosophical issues with the 2011 FIGA statute as it relates to sinkholes. We shall have to wait and see how this all plays out.
The second portion of the opinion has a greater reach than just sinkhole cases and indicates that if you participate in a lawsuit and litigate the case for a significant period of time, you have waived your right to appraisal. So, if you want to go to appraisal, make sure not to litigate the case too long before invoking that provision. The question here is how long is too long? All we know for sure is that six weeks prior to trial after two years of litigation is too long.
Stay tuned for more BeWaRe consumer alerts.