Column: New insurance laws limit claims, shorten deadlines

Jun 14, 2011

The following article was published in the South Florida Sun Sentinel on June 14, 2011:

New insurance laws limit claims, shorten deadlines

By Daniel Vasquez

New property insurance laws that take effect this year put new restrictions on how much individual condo, home and property owners — as well as association boards — can be reimbursed for storm damages as well as placing tighter deadlines on when claims can be made.

For instance, individual property insurance policyholders — both inside and outside HOAs and condo communities — as well as community associations now have a three-year deadline to file a claim. While Florida statutes did not provide a deadline in the past, insurance contracts often gave a five-year deadline.

“Prior to this new law, there has never been a legally mandated deadline for filing a claim,” said Howard J Perl of the law firm of Katzman, Garfinkel and Berger, which specializes in community association law. Perl’s firm is among the first to begin offering free seminars for owners and board members about the insurance laws, passed by the Legislature and enacted just weeks before the official start of hurricane season June 1.

Perlman said in the past contract laws generally provided policyholders with a five-year deadline and left open the option to request a claim be opened even a

Now owners and associations have 36 months to file an original or supplemental claim or reopen a claim after the exact day a hurricane makes landfall and rips away your roof, ruins your balcony or causes other major damage.

The new laws also shorten the window in which a policyholder can sue an insurance company for breach of contract, such as paying a policyholder too little for repair and replacements costs.

Prior to the new laws, a policyholder had five years from the date of a breach of contract to file a lawsuit. The new laws abbreviate the deadline to five years from the date of loss instead of five years from the date of a contract breach. That means you now have five years from the time property damage was caused — no matter how long it took the insurer to pay you or how long it took for you to realize you were underpaid.

Before this year, owners and associations could purchase policies that reimbursed for the replacement cost of the damage to a unit or building and personal property. That meant insurers could not claim flooring, appliances or jewelry were worn and worth less and therefore offer lower replacement payoffs. But changes in the law passed by the Legislature allow insurers to do just that.

“Insurers were required to pay the replacement costs without holding back any amounts for depreciation,” Perlman said. “The new law changes reimbursement procedures for both dwelling and personal property losses.”

Under the new laws, if there is a loss to a dwelling, the insurer must pay the actual cost value less the deductible. The actual cost value is the cost of replacement less depreciation. If the replacement costs associated with the damage to the dwelling exceed the amount of the actual cost value, the insurer will be required to pay for any costs necessary to repair the dwelling.

And if the building or unit is completely destroyed, the insurer must pay the replacement cost without deducting for any depreciation.

As for the loss of personal property, whether or not the property is replaced, the insurer is still required to offer coverage to pay the replacement cost without holdback for depreciation. The new law, however, now allows insurers to offer discounts to policyholders who agree to enter into special financing arrangements that only pay for personal property that is actually replaced. That means policyholders must provide receipts for the purchase of the replacement property.

What you can do:

Owners and associations should contact their insurers and ask about changes related to the new laws.

Look out for free seminars. The Jay Steven Levine Law Group will also a free Hurricane, Casualty and Property Damage Seminar for community association directors, officers and managers at the Renaissance Fort Lauderdale-Plantation Hotel at 1230 S. Pine Island Road in Plantation from 9 a.m. to noon Friday. To register, contact Jay Steven Levine or Kristin Kopenski at 561-999-9925 or at

Katzman, Garfinkel and Berger will host the Florida Disaster Preparedness and Recovery Seminar from 6 to 8 p.m. July 11 at its Law and Learning Center at 5297 W. Copans Road, Margate. To register, contact Nichole Breighner at 954-315-0372 or at

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