The number of homeowner insurance policies containing a Reasonable Emergency Measure clause has significantly grown over the last several years. Under many of these policies, insureds are provided additional coverage for emergency services furnished to protect the insured property from further damage. Customarily, these clauses provide for a coverage limit and, consequently, any amount incurred above this threshold requires written authorization and approval from the insurer for the additional coverage to be extended.
In All Insurance Restoration Services, Inc. a/a/o Miguel Cediel and Mariela Cediel v. Citizens Property Insurance Corporation, 46 Fla. L. Weekly D2193a (Fla. 3rd DCA 2021). Florida’s Third District Court of Appeal recently affirmed summary judgment for a defendant insurer where the damages sought by the restoration company that provided the emergency services exceeded the limits of the homeowner’s insurance policy and no prior approval was obtained before the emergency services were provided.
The pertinent facts of the opinion were as follows. On October 22, 2017, the home of the policyholders, Miguel and Mariela Cediel, sustained water damage when the plumbing source in their refrigerator leaked. Four days later, the Cediels hired All Insurance Restoration Services, Inc. (“AIRS”) to perform water mitigation services and assigned their benefits under the homeowners’ policy to AIRS. AIRS completed the remediation services a little over one week later, on October 30, 2017. On that same day, the Cediels, through their attorney, notified their homeowners’ insurer, Citizens Property Insurance Corporation, of their claim. Citizens inspected the property on November 17, 2017. On November 29, 2017, AIRS sent Citizens an invoice for $7,238.75 for the water mitigation services. Prior to submitting this invoice, neither AIRS nor the Cediels requested prior approval from Citizens to exceed the $3,000 limit for reasonable emergency measures. On December 2, 2017, Citizens sent a letter to AIRS, enclosing a $3,000 check “towards reasonable emergency measures limit of liability portion of the loss.”
AIRS deposited the $3,000 check and proceeded to file a complaint against Citizens for the balance of the invoice. AIRS alleged, as assignee of the Cediels, that Citizens breached the insurance contract by failing to completely pay AIRS for the emergency water mitigation services rendered to the Insureds. Citizens moved for summary judgment against AIRS and the trial court granted the motion, ruling that there was no record evidence that neither AIRS nor the insureds requested approval to perform work in excess of $3,000, and that the plain and ordinary meaning of the policy did require such prior request and approval. The Third DCA affirmed the trial court’s ruling and held that if the “language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written.” Id. (quoting Washington Nat'l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013)).
Policy limitations should be considered in direct and assignee claims for remediation services, like those involved in All Ins. Restoration Servs.Callahan and Fusco will continue to monitor court decisions on this issue.