We’ve previously discussed, here, what happens when an Insurance Company tries to invoke their option to repair under the insurance policy. Under Florida law, when an insurance company opts to repair damage instead of reimburse the policy holder, a contract is created between the insurance company and the policy holder that requires the insurance company to restore the property to its pre-loss condition. This is known as a Drew contract, from the case Drew v. Mobile USA Insurance Co, where Florida’s Fourth District Court of Appeals announced this rule.

How does an insurance company opt to repair? The policy might say “in writing” but Florida’s Second District Court of Appeal recently said they can opt to repair by their conduct, regardless of what the policy says.

Mary Iwanicki’s home was insured by SafePoint Insurance. Her home sustained water damage. SafePoint’s adjuster asked her if she had hired a restoration company. When she said she had not, the adjuster said they would send a restoration company. The restoration company did not consult Ms. Iwanicki about the work they were performing or give her any estimates or invoices.

Unfortunately, the restoration company did not complete the job. Ms. Iwanicki sued, alleging that a Drew contract had been formed. The trial court granted SafePoint a directed verdict, because the policy said an option to repair had to be exercised in writing. The Second District Court of Appeals reversed the trial court. They noted that SafePoint chose and sent out the restoration company, and the restoration company dealt with SafePoint, not Ms. Iwanicki, regarding estimates, invoices, and payment. The court held that this course of conduct could have modified the policy’s written notice requirement, and Ms. Iwanicki should have been allowed to attempt to convince a jury it did so.

So, if an insurance company sends a contractor to repair damage, and all bills from the contractor go to the insurance company, it is possible that a Drew contract has been created, regardless of any written notice provision in the policy.

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