As Floridians, many of us have gone through the process of filing an insurance claim for hurricane damage. This means many of you have seen your insurance company attempt to undervalue your claim by saying the damage was not caused by the massive amounts of wind and rain that were dumped on your house but—rather—by sudden failure due to wear and tear or faulty maintenance (causation defenses), or that you did not protect the property or provide enough evidence of the damage (failure to fulfill post-loss obligation defenses). These are common tactics insurance companies take to avoid paying claims. But, where is the evidence to support these defenses?
Often when we ask, in litigation, for this evidence, insurance companies tell us “Well, that's privileged. You can't have that.” As experienced hurricane insurance claim attorneys who have been fighting for homeowners for decades, at Taylor, Warren, Weidner & Hancock our fight never ends there. While litigating this Hurricane Sally insurance claim, TWWH attorney, Brian Hancock, asked the trial court, Judge Shackelford, to make the insurance company produce the evidence that supported its defenses. Judge Shackelford ordered production of the discoverable evidence that was relevant to the insurance company's defenses. You can read her order here. The insurance company appealed, and attorney Hancock fought them before the First District Court of Appeal ("DCA") as well. We are now very proud to report a recent ruling from the First DCA denying American Traditions Insurance Company's appeal and supporting Judge Shackelford's order for production of this critical evidence.
The Evidence the Insurance Company Attempted to Withhold
The Field Adjuster's Observations and Findings
Typically the first thing to occur after a hurricane insurance claim is reported is the initial inspection of the property by a field adjuster. He or she will come out, take photos, prepare comments accompanying the photos, and then prepare a report or “loss recap” and an estimate. The insurance company then relies upon this information in deciding to either issue a payment on the claim or deny all or part of the claim. Often the evidence the field adjuster generates during the initial inspection after a hurricane is the only evidence the insurance company has that reflects the condition of the property immediately after the storm, making it the most critical evidence to either support or dispute the insurance company's “wear and tear” type causation defenses as well as its failure to fulfill post-loss obligation defenses.
Yet, insurance companies almost always refuse to produce the evidence generated by their field adjuster in the days or weeks after a hurricane, claiming it is privileged. Judge Shackelford disagreed, finding it relevant to the insurance company's defenses and its “basic evaluation” of the claim and ordered production of the evidence while carving out attorney-client communications and work-product materials, the only items that were actually privileged.
The Insurance Company's Pre-Loss Observations and Findings
In this Hurricane Sally insurance dispute, American Traditions Insurance Company also did not want to produce its underwriting inspection report and photos. These are the reports insurance companies generate for purposes of determining whether your home is in good enough condition to justify a renewal of your policy. As experienced hurricane insurance claim attorneys, we have often seen an insurance company find your property is in “good condition” for purposes of collecting a premium only to find, a very short time later, your home was worn and torn and deteriorating when it comes time for the insurance company to pay your claim. It is easy to see why the insurance company in this case did not want to produce its July 2019 pre-Sally inspection report and photos which supported its decision to renew on the very property—post-Hurricane Sally—it claimed was riddled with pre-existing damage. Judge Shackelford ordered its production.
American Traditions Insurance Company's Argument on Appeal
On appeal, American Traditions Insurance Company argued the law in Florida is that no document contained within an insurance company's “claims file” (an amorphous digital thing) can be discovered in the breach of contract action and that such discovery would cause an insurance company “irreparable harm.” On behalf of the policyholder, TWWH attorney Brian Hancock asserted the same arguments he had to Judge Shackelford, that this evidence is not privileged and it is relevant to the insurance company's defenses. On March 3, 2023, the First DCA denied American Tradition Insurance Company's appeal “on the merits,” finding it unworthy of a written opinion. While this victory was cherished, this is not the first time TWWH has fought this same fight, over the same type of evidence many insurance companies try to hide, i.e., what their field adjuster observed and documented during the initial inspection. You can read about another order we received from the First DCA in a similar hurricane insurance dispute here.
We will be very curious to see the field adjuster comments, photos, and report, and the pre-loss underwriting report and photos once they are finally produced to us in this Hurricane Sally case. In answer to the question initially posed: Where is the evidence to support these defenses? We may find there is none, or that it's weak at best. Either way, we will look forward to taking it to a jury to decide.