Florida approves endorsements that limit matching

Matching requirements are a huge issue in insurance. When only part of the covered property is damaged, such as some of the tiles of a roof–and matching replacement tiles cannot be found, should the entire roof be replaced, or can the insurer repair only the damaged part of the roof using mismatched tiles? 

Florida is one of a few states with a matching statute codified in their law. Florida Statutes Chapter 626, Section 9744 states:

“Unless otherwise provided by the policy, when a homeowner’s insurance policy provides for the adjustment and settlement of first-party losses based on repair or replacement cost, the following requirements apply: 

(2) When a loss requires replacement of items and the replaced items do not match in quality, color, or size, the insurer shall make reasonable repairs or replacement of items in adjoining areas. In determining the extent of the repairs or replacement of items in adjoining areas, the insurer may consider the cost of repairing or replacing the undamaged portions of the property, the degree of uniformity that can be achieved without such cost, the remaining useful life of the undamaged portion, and other relevant factors.” 

However, in recent months, the Florida Office of Insurance Regulation has approved endorsement forms submitted by at least eight property insurers that limit the amount they will have to pay to replace undamaged property to maintain matching with the replaced damaged property.

All of the forms limit the amount the insurers will pay due to matching at 1% of the policy limit. For a $500,000 policy, the most the insurer will pay to replace undamaged parts of the property would be $5,000. 

Florida’s insurer-of-last resort Citizens Property Insurance Corp., uses a different method in its endorsement related to matching. The state-backed insurer’s endorsement first requires the policyholder to pay for matching repairs out-of-pocket and then include that in a claim for reimbursement.

In contrast, Kentucky, another state with a specific matching statute, recently published an advisory opinion stating that placing a sublimit on matching would in fact be in violation of their statute.

Florida and Kentucky are two of the few states that have a specific matching statute codified in their law. The majority of states do not, but may have other laws that apply. 

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