FL Appeals Court Clarifies Replacement Cost Damage Claims in Property Insurance Breach

In the case of Richard Brito and Pamela Garcia v. Citizens Property Insurance Corporation, the court addressed the dispute over damage valuation under a homeowner's insurance policy.

The carrier provided property coverage but denied a claim based on policy provisions. The insured parties argued that they were entitled to replacement cost damages regardless of whether repairs were completed, while the carrier claimed damages should be limited to the actual cash value since the work was not performed. The trial court sided with the carrier, restricting damages to actual cash value and excluding replacement cost evidence, resulting in a directed verdict for the insurer.

Upon appeal, the Florida Second District Court found this approach inconsistent with both the policy terms and statutory provisions. The appellate court held that initial payment of actual cash value is conditional on coverage being established and that denial of coverage cannot be leveraged to restrict remedies for breach of contract. The court emphasized the need to resolve disputes in a single trial and ruled that evidence of replacement cost damages should not be barred prior to establishing coverage.

This decision reverses the lower court's ruling and remands the case for further proceedings. Additionally, the court certified a conflict with a prior Fourth District ruling that prohibited introduction of evidence for unperformed work when coverage was denied.

This case highlights critical interpretations of insurer obligations in claim adjustments and remedies available to policyholders, signaling potential impacts on handling replacement cost claims and breach allegations in Florida.