First District Court of Appeals Affirms Carrier’s Payment of Actual Cash Value in Hurricane Sally Insurance Dispute; the Breach Must Occur Prior to Filing the Complaint

Hurricane Sally caused damage to the insureds’ residence in September 2020 when rainwater leaked into the interior of the residence. The carrier inspected the property, and an estimate was prepared totaling $20,535.73, the replacement cost value. After non-recoverable depreciation of $256.72, recoverable depreciation in the amount of $6,145.81 and the deductible of $6,008 were taken into consideration, a payment totaling $8,125.20 was issued to the insureds. 

The insured filed suit for breach of contract in June 2021. Prior to trial, the insureds provided only an estimate prepared by a public adjuster that was approximately $100,000 more than the estimate prepared by the carrier. 

At trial, competing estimates by general contractors, both created years after the complaint was filed, were entered into evidence and testimony was provided regarding the estimates, both of which exceeded the estimate upon which payment was made. Both parties moved for directed verdict, which were denied. The jury found the insureds failed to prove the carrier breached the policy, and judgment was entered in the carrier’s favor. The insureds appealed. 

In its decision, the appellate court noted that the initial burden is on the carrier to show it paid at least the actual cash value of the insured loss. Once the carrier provides the estimate and pays the actual cash value as estimated, the burden shifts to the insured to prove that the amount of the payment did not reflect the fully insured loss. 

Here, the carrier paid the actual cash value as estimated, and no evidence was provided to show that payment did not reflect the actual cash value of the fully insured loss. No evidence was provided as to a disagreement of the actual cash value prior to filing the complaint for breach of contract. The only estimates provided were prepared years later and after the complaint had been filed. Therefore, the court found the jury was correct in finding there was no breach of the policy as of the filing of the complaint and affirmed judgment in favor of the carrier. 

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