In Florida, if an insured fails to meet a post-loss obligation, is it a complete bar to recovery? In a recent decision, the Third District Court of Appeal certified a conflict with the Fourth District Court of Appeal and held that an insurer must be prejudiced by the insured’s non-compliance with a post-loss obligation in order for the insured to forfeit coverage.

In American Integrity Insurance Company v. Estrada,1 the carrier issued an HO3 all-risks homeowner’s insurance policy to Ms. Estrada, who made a claim for losses sustained at her home after the property was burglarized and vandalized. The insured filed a claim with the carrier, who denied the claim. During litigation, the carrier alleged that Ms. Estrada failed to comply with certain post-loss obligations, including failing to complete an examination under oath, provide requested documents, or submit a signed and notarized sworn proof of loss.2

At trial, both parties disagreed as to whether or not Ms. Estrada substantially complied with her post-loss obligations. Ms. Estrada’s counsel moved for a directed verdict and argued it was the carrier, not the insured, who had to “plead and prove,” that it was prejudiced by Ms. Estrada’s alleged noncompliance.3 The trial court, relying on the interpretation of an uninsured motorist policy in State Farm v. Curran,4 granted Ms. Estrada’s motion; the jury subsequently awarded damages and the carrier appealed.

In reviewing the trial court’s decision, the Third District Court of Appeal agreed with the Fourth District Court of Appeal that Curran was no longer instructive in cases dealing with post-loss obligations. However, the Third District went further and disagreed with what happens after an insured is found to not have substantially complied with the policy. In the Fourth District, a carrier need only establish that the insured failed to comply with post-loss obligations to have a valid coverage defense. However, the Third District disagreed. In Estrada, once the carrier demonstrates that the insured failed to substantially comply, a material breach is presumed, and the insured must meet the burden of showing how the carrier was not prejudiced. The appellate court found that:

[W]hen an insurer has alleged, as an affirmative defense to coverage, and thereafter has subsequently established, that an insured has failed to substantially comply with a contractually mandated post-loss obligation, prejudice to the insurer from the insured’s material breach is presumed, and the burden then shifts to the insured to show that any breach of post-loss obligations did not prejudice the insurer.5

Thus, while failing to meet a post-loss obligation under Estrada may not always be fatal to a claim, a policyholder is always in a better position when he or she abides by a policy’s conditions precedent to avoid such disputes in the first place.
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1 Am. Integrity Ins. Co. v. Estrada, 276 So. 3d 905, 916 (Fla. 3d DCA 2019).
2 Id.
3 Estrada, 276 So. 3d at 909.
4 State Farm Mut. Auto. Ins. Co. v. Curran, 135 So. 3d 1071 (Fla. 2014).
5 Estrada, 276 So.3d 905, 916.