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Insurance Claims: Coverage Defense Waived by the Insurance Company because they Waited too Long to Assert it

Fire DamageA Florida appellate court recently concluded an Insurance Company’s coverage defense had been waived because the insurance company waited too long to assert them.

Axis Surplus Insurance Company vs. Caribbean Beach Club Association, Inc., 2014 WL 2900930, (2nd DCA 2014), involved a fire loss.  In April of 2003, a fire swept through the time share condominium in Ft. Myers Beach causing extensive damage to the property.  The insured had purchased an insurance policy that included coverage for fire damage.  The insured had also purchased Law and Ordinance coverage for an additional premium.

The insured made a claim for fire damage.  Both the insurance company and the insured knew that Lee County might enforce the “50% rule” contained in its ordinances. The 50% rule mandates that if a building is more than 50% damaged, any reconstruction or repair must comply with current building codes. If Lee County enforced the 50% rule, the insured would have to raise the entire building to meet existing flood elevation requirements.

Both the insurance company and the insured cooperated in a common goal of repairing, not replacing, the damaged building; they tried to convince Lee County not to enforce the 50% rule. Unfortunately, in November 2004, some nineteen months after the fire, Lee County informed both the insurance company and the insured that it would enforce the 50% rule. Therefore, the insured would be required to replace its building to satisfy current flood elevation codes.

After receipt of this news, the insured continued to cooperate with the insurance company.  But things changed some 19 months later when the insurance company, for the first time, informed the insured that it would rely on the two year clause in the Law and Ordinance Coverage endorsement to deny payment for the increased construction cost because the replacement was not completed.  Except for the general, non-specific, reservation of rights letter, the insurance company had never raised the two year clause previously with its insured.

Litigation between the insurance company and the insured followed.  The trial court granted summary judgment in the insured’s favor, and an appeal followed.  On appeal, the appellate court sided with the insured.  In so doing, the appellate court reasoned that the insurance company waited too long to assert the coverage defense.

The Appellate court concluded that the insurance company’s conduct had in fact waived the coverage defense it attempted to assert later.  It noted that that if an insurance company intends to rely on a reservation of rights, that it should specifically inform the insured of all the valid coverage defenses as soon as practicable.  In this instance, the insurance company simply waited too long.  In this case, the insurance company’s failure to bring the coverage defense to the insured’s attention, even though the insured expected the entire claim to be paid and the insurance company continued to adjust the entire claim after the two-year expiration, were unequivocal acts inconsistent with invoking the forfeiture. In other words, when an insurance company acquiesces to an insured’s failure to strictly adhere to a timetable of payment or performance, courts are inhospitable to the insurer’s sudden invocation of strict enforcement of forfeiture provisions.

Space Heater Fires

heaterfire.jpgThe chill is back in the air. That means those old space heaters make a return to keep many warm on these cold nights and mornings.

With the drop in temperatures comes the possibility of an increase in fires for both homeowners and business owners alike. Space heaters are a popular and inexpensive heating option during the cold days of winter. However, they often times also play a role in fire losses during the cold dry days of winter too.

While space heater fires are not common, they could be fatal. Recently, a 62 year old woman was found dead, and the authorities attributed the cause of death to a fire that was started by a space heater.

If you’re going to use a space heater, make sure it is fully operational. Check the space heater for frayed wires before turning it on. Never overload a plug socket or use an extension cord for power. And most importantly, never use the portable heating device overnight or unattended.

Here are some other safety tips to consider when using a space heater:

– When buying a heater, look for one that has been tested and labeled by a nationally recognized testing company, such as, Underwriter’s Laboratories Inc. (UL).

– Keep the heater three feet away from drapes, furniture or other flammable materials. Place the heater on a level surface away from areas where someone might bump it and knock it over.

– Keep electric heaters away from water. Never use them near a sink or in the bathroom.

Additionally, circuit overloads have also proven to be common winter weather mishaps as homeowners increase their use of electricity, lights and heat during the holidays.

Our firm often times sees an increase in large residential and commercial fires during the winter months that could have easily been prevented.

Frying a Turkey? Here are Some Tips to Safely Enjoy a Fried Turkey

fryturk9.jpgFrying turkeys during the holidays has recently become very popular all over the country, including right here in South Florida.

The popularity has to do with a number of reasons, including the reduced time needed to cook a turkey in a deep fryer, versus other conventional methods such as an oven or a rotisserie grill.

But another reason it has become so popular, quite simply, is because fried turkey tastes great.

However, with the increased popularity of turkey fryers over the past several years also comes increased risk. Indeed, twice as many cooking related house fires occur on Thanksgiving than on any other day of the year. Not only that, but the fires on Thanksgiving are typically deadlier and more expensive.

While most Americans are counting their blessings, firefighters are putting out nearly 4,300 blazes. On a normal day, 23% of fires take place in residences, but on Thanksgiving, that percentage jumps to 35%. The vast majority of these fires–83%–start on top of the stove or in the oven. These blazes claim more lives than fires on an average day, and cause 25% more property damage.

Additionally, while frying turkeys has become much more prevalent during Thanksgiving, so have the fires associated with turkey fryers. Part of the reason for the increased amount of fires associated with frying a turkey is the equipment used to fry the turkey. The large fryers use gallons of cooking oil, which boils at 325 degrees Fahrenheit. If too much oil is added it can easily boil over–or the fryers can tip–creating the perfect catalyst for a holiday fire that could cause extensive damage, or even death.

From 1998 to 2007, there were 138 reported incidents involving turkey fryers, according to the US Consumer Product Safety Commission. These resulted in 36 injuries and nearly $8 million in property loss.

If you chose to fry a turkey during Thanksgiving, or the holidays, here are some safety tips to follow:

• Only use a container specifically designed to fry turkeys and follow the manufacturer’s directions for use.
• Turkey frying is an outdoor activity only. Set the fryer a safe distance away from any building, especially homes and sheds. Do not use a fryer on a wooden deck or inside a garage.
• Never leave a turkey fryer unattended. Remember that you have flammable oil heating over an open flame with no temperature control so don’t take any chances.
• Use an oil with a high smoke point like peanut, canola, or safflower oils.
• Before using oil in a fryer, measure how much you will need by placing the turkey in the fryer and adding water until it is 1 to 2 inches over the turkey. Remove the turkey and mark the water line. Use this line to indicate how much oil to use. Remove the water and dry the fryer thoroughly before filling it with oil to the designated line.
• Always use a defrosted turkey. Lower and raise the turkey slowly so the hot oil will not splash.
• The cook should wear gloves, long sleeves and an apron to avoid burns from splashing oil.
• Be sure to keep an all-purpose fire extinguisher near by. Never attempt to put out a grease fire with water!
• Once the turkey is done, turn off the heat source to let the oil cool.
• Be sure to keep kids and pets away from the fryer since the oil will remain hot for hours after use.

Our Miami insurance dispute lawyers handle fire claims for homeowners. Our attorneys represented insurance companies before 2006, when we opened a firm dedicated to fighting for the rights of consumers. We understand how insurance companies work. And we have the knowledge and experience necessary to represent homeowners in disputes over an insurance claim.

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