Fla. Insurer Eyes Flood Liability Appeal
The Citizens Property Insurance Corp. (CPIC) is considering appealing a Florida circuit decision making it liable for flood damages from Hurricane Ivan, according to a spokesman for the state's insurer of last resort.
Late last month Leon County Circuit Judge Kevin Davey ruled in favor of the plaintiffs in a class action suit seeking to force CPIC to pay full policy limits for both wind and flood damages from last year's Hurricane Ivan.
In doing so, the judge upheld the principles of the Florida Circuit Court of Appeals' 2004 Mierzwa decision requiring insurers to pay for flood losses even if they were excluded from coverage.
In the current case of Scylla Properties LLC vs. Citizens Property Insurance Corp. about 350 Citizens policyholders sought coverage for full policy limits, even though most of the damage from the coastal Hurricane Ivan came from flooding and not winds.
Citizens' spokesman Justin Glover said an estimated 15,000 policyholders could make up the class action universe.
Before a final decision about an appeal can be made Judge Davey must hand down the final ruling, Mr. Glover said.
Earlier this year, Florida Gov. Jeb Bush signed into law a bill negating the requirements of Mierzwa, but it will have an effect only on future cases.
Eric Goldberg, American Insurance Association assistant general counsel, said the Scylla decision "represents a complete distortion of the valued policy law."
"The court has disregarded the insurance policy, providing coverage and an undeserved windfall for thousands of policyholders who never paid for it," he said.
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