In a recent post on Property Insurance Coverage Law Blog, Jeremy Tyler discussed general issues with the statute of limitations for filing lawsuits. As Jeremy correctly pointed out, the statute of limitations is a legal deadline for filing a lawsuit. If a lawsuit is not filed before the statute of limitations has expired, the lawsuit may be barred, despite the merits of the action. Complying with the statute of limitations is extremely important, and any association that suffered damages from Hurricane Wilma should pay close attention to the status of its claim and immediately make decisions on how to best proceed.
In Florida, an action for breach of contract has a five year statute of limitations. Thus, the insured has five years to commence an action for breach of contract or the suit may be barred. While there certainly are exceptions to this rule, the main question that arises in the context of an insurance dispute is when the five year statute begins to run.
Insurance companies generally argue that the five year statute begins to run from the date of loss, i.e. the date the storm caused damage to the property. In some states like North Carolina and Wisconsin, this position is correct. In Florida, however, courts have generally held that the statute of limitations for breach of an insurance contract runs from the date that the insurer breached the contract. Therefore, the proper beginning of the five year timeframe should be the date the insurer breached the contract by failing to pay the amounts owed.
While the timeframe for filing a claim for breach of an insurance contract may seem clear in Florida, there are a number of other factors that need to be considered. Because most associations and board members are not familiar with insurance law, they may not realize when the breach actually occurs. Similarly, there can be issues raised with supplemental and re-opened claims that may cause the statute of limitation to run sooner than the policyholder thinks.
Hurricane Wilma was one of the most destructive hurricanes to hit the State of Florida. Many associations in southern portions of the state were significantly damaged. As the five year anniversary of Wilma approaches, associations should mark October 24, 2010 on the calendar. If you feel that you have not been properly paid for your damages, currently have an open claim being investigated, or are involved in an appraisal with the insurance company, I strongly suggest contacting an insurance coverage attorney now to ensure that your rights are protected. Waiting until it is too late may leave even the strongest claims unrecoverable.