New Changes to Florida Property Insurance Statute of Limitations

A statute of limitations serves to restrict access to the courts after a specified amount of time has passed. The reasons for such are many, but the underlying principle is simply that if you wait too long, you give up the opportunity to resolve your issue with the courts. The statute of limitations is created by the legislature, but the parties to a contract can also agree to limit the time to bring an action before a court of law. When this happens, a question often arises as to which controls, the statute or the contract.

In Lakeview Condo. Owner’s Ass’n v. Nationwide Mut. Ins. Co., No. 3:09cv543, 2011 WL 1453813 (N.D. Fla. Apr. 7, 2011), the condominium association’s insurance policy required that all legal action be brought “within 5 years from the date the loss occurs.” The condominium association had apparently suffered a termite related collapse loss to its property more than five years prior, and the insurer raised the contractual limitation on court action against the association. The court looked to the Florida statutes to determine whether the contract or the statute controlled:

Under Florida law, “[a]ny provision in a contract fixing the period of time within which an action arising out of the contract may be begun at a time less than that provided by the applicable statute of limitations is void.” Fla. Stat. § 95.03. Florida Statute § 95.11(2)(b) provides that an action on a contract founded on a written instrument must be brought within five years. A cause of action for breach of an insurance contract accrues at the time the insurer breaches its obligation to pay a claim rather than at the time of loss. Passman v. State Farm Fire & Cas. Co., 779 So.2d 323, 325 (Fla. 2d DCA 1999).

The policy provision upon which Defendants' eleventh affirmative defense is based requires an action to be filed not within five years from the date of breach but, rather, within five years from the date of loss. Where, as here, the date of loss antedates the date of breach, the provision contravenes Florida law by effectively reducing the otherwise applicable limitation period. Defendants' attempt to shorten the limitations period is thus void under § 95.03. See Palma Vista Condo. Ass'n of Hillsborough County, Inc. v. Nationwide Mut. Fire Ins. Co., No. 8:09–CV–155–T–27EAJ, 2010 WL 4274747, at *6 (M.D.Fla. Oct.7, 2010) (finding the identical provision in a Nationwide policy unenforceable under § 95.03).

The court held that the insurance policy’s provision that limited legal action to a period shorter than allowed by the relevant statute of limitations was void, and the condominium association was entitled to summary judgment in its favor on the issue.

While this decision is still fresh off the press, having been decided just over one month ago, important changes have since taken place to Florida’s statute of limitations for property insurance claims. On May 17, 2011, Governor Rick Scott signed new Florida legislation that changed the statute of limitations for property insurance claims to run “from the date of loss,” rather than from the date of the breach. While Fla. Stat. § 95.11 is changing, Fla. Stat. §95.03 is not, and any policy provision that attempts to shorten the time for legal action to less than five years from the date of loss will still be void in Florida.

For a thorough review of this and other major parts of this new Florida legislation, check out Chip Merlin’s analysis over on the Property Insurance Coverage Law Blog.

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