When a hurricane damages your property, you anticipate your insurance coverage firm to play honest. However what occurs when insurers undervalue claims, drag out disputes, after which disguise behind new legal guidelines to keep away from accountability? That’s exactly what occurred in Cindy Vo v. Scottsdale Insurance coverage Firm—a case that delivered an important victory for policyholders in Florida.
A Traditional Case of Undervaluation
In 2020, Vo, a home-owner, filed a hurricane injury declare with Scottsdale Insurance coverage Firm. Scottsdale’s response? A surprisingly low estimate of $420.64—an quantity so small it didn’t even exceed the wind deductible. Scottsdale paid nothing.
Vo employed a public adjuster, who estimated the injury at $38,584. Scottsdale wasn’t budging. The insurer introduced in one other adjuster, who conveniently agreed with Scottsdale’s unique, drastically low valuation.
Annoyed, Vo filed a Civil Treatment Discover (CRN), alleging unhealthy religion and statutory violations. After a protracted battle, an appraisal awarded her $34,545.66—proving Scottsdale had grossly underpaid. The insurer lastly paid up, and the breach of contract case was settled in 2021.
Does Florida’s New Regulation Dangerous Religion Regulation Block Unfair Claims Observe Lawsuits?
In 2022, Florida’s legislature handed part 624.1551, creating new boundaries for policyholders to sue insurers for unhealthy religion. Beneath this legislation:
- Policyholders couldn’t file a foul religion lawsuit except a court docket had dominated the insurer breached the contract.
- Appraisal awards didn’t rely as proof of breach.
- The legislation utilized to extracontractual damages claims below part 624.155.
This stacked the deck towards policyholders, giving insurers a robust escape path to keep away from accountability.
When Vo filed her unhealthy religion lawsuit in 2023, Scottsdale used the brand new legislation as a protect, arguing she couldn’t sue as a result of her declare had settled by means of appraisal—not a court docket ruling.
The trial court docket agreed with Scottsdale and dismissed her case, ruling that her unhealthy religion declare was invalid and not using a formal court docket dedication of contract breach. This view is the “get out of jail free card” rationale, which many wrongful-acting carriers use, as famous in Dangerous Religion Insurance coverage Practices Shielded By “Get Out of Jail Free” Late Funds. Chip Merlin acknowledged the plain irony of such a rule:
Think about a world the place breaking the principles carries no actual penalties. That’s the fact policyholders face when insurance coverage corporations delay or wrongfully deny claims, solely to make a late cost after an appraisal and stroll away with none actual accountability….
…in case you ultimately pay what you owe—irrespective of how lengthy you drag it out—you’ll be able to keep away from any actual penalties for wrongful declare practices. The result’s an uneven enjoying subject the place policyholders undergo by means of monetary uncertainty, property deterioration, and authorized battles whereas insurance coverage corporations use delay ways as a calculated enterprise technique.
The logic behind shielding insurers from unhealthy religion legal responsibility after a late cost is deeply flawed. When a policyholder information a reliable declare, they accomplish that as a result of they want the cash to restore their house, change their belongings, or get well from a loss straight away. A wrongful denial or extended delay doesn’t simply create inconvenience—it may well power enterprise house owners and households into monetary misery, go away constructions in disrepair, and disrupt lives. It undermines the rationale why People buy insurance coverage within the first place. The truth that an insurer can later ‘repair’ the scenario with a cost—together with curiosity—doesn’t erase the hurt attributable to the preliminary refusal to pay or roadblocks inflicting delay.
Thankfully, Vo didn’t surrender. She appealed, arguing that the brand new legislation couldn’t apply retroactively to her case since her unhealthy religion declare had vested earlier than the statute was enacted.
The First District Courtroom of Enchantment agreed, 1 holding that:
- New legal guidelines can not retroactively get rid of a sound reason for motion.
- Part 624.1551 imposed new authorized burdens on policyholders, that means it might solely apply prospectively.
- Vo’s proper to sue for unhealthy religion had already vested in 2021—earlier than the legislation existed.
What This Means for Florida Policyholders
This ruling protects policyholders and sends a powerful message. Insurers can’t rewrite historical past. If unhealthy religion occurred earlier than a brand new legislation, policyholders nonetheless have the appropriate to sue. Appraisal isn’t a loophole for insurers. Simply because a declare settles by means of appraisal doesn’t imply insurers acted in good religion. Holding insurers accountable remains to be doable. Regardless of legislative efforts to weaken shopper protections, courts aren’t letting insurers off the hook.
Policyholders Should Struggle Again
For years, insurers have pushed for legal guidelines that make it tougher for householders to problem unhealthy declare dealing with. Cindy Vo’s case proves that policyholders can combat again—and win.
If you happen to’re coping with a lowball declare provide or unfair denial:
- Doc all the things – Maintain information of estimates, inspections, and insurer communications.
- Search skilled assist – Public adjusters and attorneys can stage the enjoying subject.
- Don’t settle for the primary provide – Problem any suspiciously low injury estimates.
- Know your rights – The legislation is evolving, and courts nonetheless shield policyholders.
This Florida unhealthy religion legislation determination is a step in the appropriate course, making certain that insurers can’t use new legal guidelines to erase previous misconduct. This can be a warning to insurers that unhealthy religion conduct received’t go unchallenged.
Thought For The Day
“You can not oppress the people who find themselves not afraid anymore.”
—Cesar Chavez
1 Vo v. Scottsdale Ins. Co., No. 1D2023-2228 (Fla. 1st DCA Feb. 26, 2025).
