Caselaw Wednesdays – What happens to policy conditions when an Insurance Company repairs your property?

It is a homeowner’s nightmare. Extensive damage occurs to your home. You call your homeowner’s insurance to make a claim to get it fixed. The insurance company hires a contractor who does substandard work. If you sue, can the insurance company point to some requirement in the contract of insurance they claim you didn’t follow to get out of paying for the substandard work their contractor did? According to Florida’s Fourth District Court of Appeals, the answer is “No!”

Samuel and Lynn Vainberg’s condo was insured through Avatar Property & Casualty. The supply line to a toilet broke, which flooded their condo. The Vainbergs filed a claim for the damage with Avatar, their insurance carrier. Instead of paying money for the claim, Avatar elected to hire a contractor to repair the damage. Unfortunately, the contractor hired by Avatar was no Bob Villa. The Vainbergs informed Avatar of extensive damage to their home caused by the contractor. Avatar offered to have the same contractor repair some of the damage. The Vainbergs understandably refused to have that contractor perform any additional work on their home. The insurance company refused to do anything to remediate their contractor’s shoddy work.

The Vainbergs sued Avatar. Under Florida law, when an insurance company elects to repair damage under a policy, instead of paying money to the insured, it creates a contract between the insurance company and the insured 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.

In defending the lawsuit, Avatar claimed that the Vainbergs did not comply with certain terms in their insurance policy, which meant the Vainbergs were in breach of contract. This matter got appealed to the Fourth District Court of Appeals. In Vainberg v. Avatar Property & Casualty Insurance Co., the court ruled that a Drew contract is separate and distinct from the underlying insurance policy contract. In other words, even if the insured did not comply with some requirement of the insurance policy, if the insurance company elects to repair the damage to the insured property, they are still required to restore it to its pre-loss condition.

If a contractor from your insurance company has performed shoddy work, and your insurance company refuses to make you whole because they claim you did not comply with some requirement of the insurance policy, contact an attorney. Your insurance company could be made to pay.

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