Fifth DCA Upholds Validity of Post-Loss Assignment of Insurance Benefits
Apr 10, 2015
By Matthew C. Scarfone, Esq.
The Fifth DCA issued an opinion today, April 10, 2015, in an appeal involving the validity of a post-loss assignment of homeowner’s insurance benefits. The sole issue on appeal was whether section 627.405, Florida Statutes–known as the “insurable interest statute”–requires a post-loss assignee to have an insurable interest at the time of the loss. The insurer argued that, according to the statute, only a person with an insurable interest at the time of the loss can enforce an insurance contract; therefore, a post-loss assignee lacks standing. The appellate court disagreed, and reversed the trial court’s order dismissing the action. Citing a long line of cases allowing free assignability of contracts and prohibiting insurers from restricting post loss assignments, the court held that nothing in the insurable interest statute displaced this well-settled common law. In closing, the court noted that this interpretation-which imputes the insured’s interest to the assignee-allows both the insurable interest requirement and the free assignability of post-loss claims to co-exist.
To view today’s court opinion in Accident Cleaners v. Universal Insurance Company, click here.
There are currently three appeals in the Fourth DCA that also involve the validity of post-loss assignments of benefits. While these pending appeals involve a wider variety of legal issues, including the validity of so-called partial assignments, the same “insurable interest” argument was also raised. If the Fourth DCA reaches a different result, this issue could be appealed to the Florida Supreme Court.
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