Assignment of Post-Loss Insurance Benefits Does Not Violate Constitutional Homestead Restrictions – Question Certified

Following Hurricane Irma, the insured assigned his insurance benefits to a third party vendor to handle the repair work and claim negotiations with the insurer. The insurer refused to pay the vendor directly and the vendor sued the insurer for breach of contract. The insurer argued the assignment violated the Florida Constitution’s restriction against the alienation of homestead property except by mortgage sale or gift. The trial court entered summary judgment in the insurer’s favor finding the assignment was an unenforceable contract that violated the Florida Constitution. The appellate court disagreed and held an assignment of insurance proceeds was not an “alienation” of homestead property. The assignee had the right to collect benefits under the insurance contract but the assignment contract did not convey an interest in the homestead property. Because post-loss assignments are utilized so extensively, the court certified the issue to the Florida Supreme Court as one of great public importance. Speed Dry, Inc. v. Anchor Prop. and Cas. Ins. Co., 5th DCA (August 21, 2020).

• The insurer argued that insurance proceeds had the same protections as the homestead property itself. The court seemed to circumvent this argument and stated the assignee was not seeking to lien or force a sale of the insured’s homestead property to pay the contract amount.

• The court also acknowledged the significant legislative changes in 2019, however, the AOB statute was not at issue here. This is a case to watch!

Courts Remain Divided on Whether Public Adjusters Can Serve as “Disinterested” Appraisers – Question Certified

An insurer and insured agreed to submit their disputed claim to appraisal, but the insurer did not agree to allow the insured’s public adjuster serve as the insured’s appraiser. The insured filed suit and the insurer again opposed the insured’s chosen appraiser. The trial court denied the insurer’s motion for the appraisal to be conducted with a “disinterested appraiser” and ordered appraisal to proceed with the insured’s public adjuster. The insurer appealed the ruling but the Third District declined to review the trial court’s order. The appellate court again certified the same question as it had certified earlier in the year to the Florida Supreme Court to resolve the conflicts between the district appellate courts: Whether a public adjuster or appraiser who receives a contingency fee from an appraisal award can be a disinterested appraiser as a matter of law. State Farm Fla. Ins. Co. v. Long, Fla., 3d DCA (August 12, 2020).

• Contingency-fee based adjusters/appraisers may serve as a “disinterested” appraiser in the Third District. 

• Contingency-fee based adjusters/appraisers are not considered “disinterested” in the Fourth and Fifth Districts.