Series of Appellate Wins – Insurance – Florida’s Fifth and Sixth District Courts of Appeal

Nearly all Florida homes built before 1975 have cast iron pipes, and over time, cast iron is prone to corrosion, deterioration, and failure. As a result, homeowner’s carriers insuring older homes often include water damage exclusion endorsements and/or limited water damage coverage endorsements. They limit coverage for water damage from plumbing as well as the cost to “tear out” portions of the home necessary to access that plumbing for repair. Those tear out costs are often the most significant part of a claim because accessing the plumbing can involve tasks as momentous as trenching out then replacing portions of a home’s foundation.

In two related decisions, Florida’s Fifth and Sixth District Courts of Appeal found those policy endorsements ambiguous. They concluded that water damage may be subject to the endorsement’s sublimit, but coverage for tear out costs is not.

Spearheaded by Tampa Partner Mark Tinker, the CSK appellate team explained in a series of appeals that those opinions used an incorrect analysis. When the policies and endorsements are construed as a whole, they not only limit coverage for water damage, they completely exclude all coverage for tear out in any situation where that water damage limitation has been triggered. It is not a matter of tear out being covered but possibly limited, it is a matter of tear out not being covered at all. Among those decisions are newer cases from the same Fifth and Sixth Districts that previously found ambiguity; they now unanimously agree that the water damage exclusion and limited water damage endorsements are not ambiguous, and that they not only limit water damage coverage to the stated sublimit, they exclude all coverage for tear out.

People’s Tr. Ins. Co., v. Diaz, 2023 WL 8285714 (Fla. 5th DCA Dec. 1, 2023); People’s Tr. Ins. Co. v. Gunsser, 2023 WL 7395316 (Fla. App. 6 Dist. Nov. 9, 2023); People’s Tr. Ins. Co. v. Banks, 2023 WL 5944177 (Fla. 3d DCA Sept. 13, 2023); and Panettieri v. People’s Tr. Ins. Co., 344 So. 3d 35 (Fla. 4th DCA 2022).