Florida’s Third District Court of Appeal recently affirmed a summary judgment entered in favor of a property insurer, holding that there is no conflict between the policy’s three year limitation for reporting hurricane claims and the requirement that the insured give prompt notice. In Navarro v. Citizens Property Insurance Corporation, No. 3D22-0032, 2023 WL 219032, — So.3d —- (Fla. 3d DCA Jan. 18, 2023), the insured sought coverage for Hurricane Irma damage nearly three years after the storm. The court found that the policy unambiguously required prompt notice, and that the insured failed to rebut the presumption of prejudice against the insurer.
Background Information and Litigation History
Citizens issued a homeowner’s insurance policy to Pedro Navarro that was in effect when Hurricane Irma allegedly struck Navarro’s home on September 10, 2017. The policy provided that the insured must report any claim for windstorm or hurricane damage within three years after the date of the windstorm, mirroring the then-requirements under the since-amended Section 627.70132, Florida Statutes. However, the policy separately imposed a duty for the insured to provide “prompt notice” of the loss to the carrier.
Navarro testified that he noticed leaks throughout his home the day after Hurricane Irma and attempted to repair his roof on at least two occasions. However, he did not retain any documents related to the repairs. Navarro reported the claim to Citizens 31 months after Hurricane Irma. Citizen’s field adjuster inspected the property in May 2020, and due to the passage of time between Hurricane Irma and the inspection, the adjuster could not determine if the damage at Navarro’s home was a result of a single occurrence or if any of the damage was a result of Hurricane Irma. Citizens denied the claim based on late notice.
The Policyholder Failed to Rebut the Presumption of Prejudice
The trial court granted summary judgment for Citizens. The Third DCA affirmed, holding that Navarro’s claim reporting was not timely and that the policy was unambiguous. The court noted that Florida courts apply a two-step analysis for determining whether a carrier may deny a claim based on late notice.
First, the insured must provide timely notice of the claim. The Court found that Navarro did not provide prompt notice of the claim. He noticed leaks and made repairs immediately after the hurricane, but did not report the claim to Citizens until more than 31 months after the hurricane. The court held that under such circumstances, a “reasonable and prudent” person would believe that they would have a claim for damages and should therefore have reported the damage to their carrier.
Second, if notice was not prompt, the insurer is entitled to a rebuttable presumption of prejudice, which the insured must rebut with evidence. The court concluded that Navarro did not provide evidence sufficient to rebut the presumption of prejudice. Navarro did not retain any records related to post-Hurricane repairs and only submitted conclusory affidavits from his public adjuster and contractors in opposition to Citizen’s motion. Because Navarro failed to rebut the presumption of prejudice, the court held that Citizens was property entitled to summary judgment based on late notice.
Further, the Court held that the insurance policy was not ambiguous, as the “prompt notice” requirement and the three-year bar on reporting windstorm claims did not contradict each other. The court explained that “[r]ead together, the clauses require the insured to file any hurricane-related claim within three years of the storm, and, for viable claims, act swiftly upon discovering damages.”
The deadline to report claims is neither a benchmark for nor nullification of the duty to give prompt notice. Once the insured has knowledge of a loss, it is incumbent upon the insured to report the claim.
Over the past year, the Florida Legislature has twice amended Florida Statutes Section 627.70132, which sets deadlines for notice of property insurance claims. Prior to July 2021, Section 627.70132 applied only to windstorm claims reported under policies issued by admitted carriers. In July 2021, it was amended to apply to both admitted and surplus lines insurers, and to more broadly set deadlines for reporting claims, reopened claims, and supplemental claims arising from any peril. The Florida Legislature recently amended Section 627.70132 again to further reduce the time for reporting claims, down to one year for reporting a claim or reopened claim and 18 months for reporting a supplemental claim.
With these new statutory claim reporting deadlines in place, which will likely be mirrored in many insurance policies, we anticipate that some policyholders will argue that reporting a claim within the statutory deadline is sufficient. However, Navarro makes clear that reporting a claim within the deadline is necessary, but not sufficient. While statutory reporting limitations establish the last date for an insured to report a claim, an insured must still act diligently and report claims with reasonable dispatch after learning that their property has been damaged. Failure to do so may result in a claim denial.