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Florida Homeowners Insurance Consultant Review


Florida homeowners insurance laws dictate how much an insurer has to pay in the event of a “total loss” to a home.

The law that applies to total loss cases is called the Valued Policy Law. Under this law, an insurer is obligated to pay the entire amount of insurance provided under the policy even if the repair or replacement of the building could be done for less. When identifying a total loss, an insurer must consider whether the cost of building repair might exceed the property’s value. This can become complicated in cases where a single event causes two types of damage. This often occurs in the case of hurricanes, which cause damage by flood and wind. Wind is typically covered under a homeowner’s insurance policy, while flooding is not. Many questions have been raised with respect to the application of the Valued Policy Law in these cases. To learn more about this law and to get FREE Florida home insurance quotes please visit,, and speak with an informed agent.

One view taken by Florida courts is that as long as some of the damage is caused by a covered cause of loss (i.e. – windstorm), a total loss to the building would trigger the Valued Policy Law and the limit must be paid.

The common view under Florida home insurance law with respect to the recognition of a total loss is rooted in two philosophies. An “identity test” for total losses is recognized to determine if a property has become an “actual total loss”. Under this doctrine, a total loss occurs when the damage to a building removes its identity and any special characteristics that define it as a building. Another doctrine relating to total losses is the idea of a “constructive total loss”. This occurs when code requirements, and/or existing ordinances require that demolition take place due to the nature and scope of the damage.

Other determinations have also been employed to deem a total loss to a building in Florida however. Some courts simply say that if the cost to repair a building exceeds its value, then the total loss threshold has been crossed and the Valued Policy Law must apply.

As debate continues over methods of determining a total loss, still more questions arise in cases where only partial coverage applies to the claim due to multiple causes of loss from one event. In 2005, an amendment was added to the Valued Policy Law which states that the total loss must be caused by a covered peril. This would seem to quell arguments where flood damage or some other non-covered cause of loss contributed to the damage.

The most recent court case on the subject is Florida Farm Bureau Casualty Ins. Co. v. Cox, 967 So.2d 815 (Fla. 2007). In this case, damages were caused by both wind and flooding from a hurricane. The building was a total loss, but the damage by the wind only was not significant enough to have created a total loss situation. The court decided that the policy limit could be paid by a proportion that coincides with the respective damages caused by each peril. Therefore, if wind caused 40 percent of the damage and flood (which is not covered) caused the other 60 percent of damage, then the insurer would have to pay 40 percent of the policy limit to coincide with the wind damage portion of the claim.

All of this debate over valuation complicates things for Florida homeowners seeking coverage. It places an important burden on policyholders and insurance companies to take care in selecting liability limits for their homeowner’s insurance policies. Learn more today at the Premier Homeowners Insurance Blog,, to get news on the Florida homeowners insurance marketplace.


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