Understanding Florida’s Value Policy Law

Nov 21, 2017

If you have a residential home insurance policy or commercial premises insurance policy, there is an important statute that comes into play if you file a claim. It is Florida Statute § 627.702, also known as “Valued Policy Law.” This law establishes that an insurer will be liable for an insurance policy’s limits when a covered structure is destroyed by a covered loss. This may sound like common sense (if something you insured is damaged, you should get compensated through the policy) but it is extremely important to have codified since we do not want policyholders spending weeks or months in a dispute with an insurance company. 

What Exactly is Valued Policy Law? 

Under § 627.702(1)(a), when there a complete loss of a structure, manufactured building, or mobile home in Florida and insured by any insurer, the liability on the insurer is the full amount of money that the property was insured for, charged, and paid. Sub-section (b) of the statute also states that an insurer will “never be liable” for an amount in excess of the amount necessary to repair, rebuild, or replace the building following a total loss.

However, this statute does not apply if there is evidence of fraud or criminal fault on the part of the insured. 

Loss Must Have Been Caused by a Covered Peril

As mentioned in subsection (b) of the valued policy statute, a total loss must be caused by a covered peril. This is extremely important because many insurance companies narrowly defined the “peril” that will be covered. Many Floridians suffer significant damage in an incident and expect their insurance policy to help cover the repair costs only to learn that the peril was not included in their policy.

For example, if flooding from Hurricane Irma caused extensive damage to your home or business, the Valued Policy Law might not apply since, under many insurance policies, flood damage is considered to be an excluded peril. 

Total Loss Required

For Valued Policy Law to apply, you need to establish that there was a “total loss” of your building. This can be accomplished by showing that there was an actual total loss.

Another option is to establish a constructive total loss. This is when a building is damaged so severely that an ordinance or regulation would prohibit the building’s repair, such that the building must be demolished. 

Reach Out to the Insurance Litigation Group Today

It is extremely important to understand the terms of your insurance policy so that you have an understanding of your rights under Florida law. The Insurance Litigation Group is comprised of experienced and skilled Florida attorneys who can assist you in determining what you are owed under your insurance policy and can help guide you through the complex claims process. Contact us today for a free consultation if your property was damaged during a tropical storm, hurricane or other severe weather event.



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We are a client-focused law firm that fights aggressively on behalf of residential and commercial policyholders, contractors, restoration and mitigation companies, to produce maximum recovery results from insurance companies through our unique expertise, deep understanding of insurance law, cutting edge technology and proactive approach to litigation.

Insurance Litigation Group serves clients across the state of Florida. With over 5 offices statewide, our attorneys have the knowledge, skills and experience to resolve your dispute against the insurance company. 

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Contact us today about your situation so we can fight to get you paid. We can assist you in any coverage dispute, disagreement over liability or damages, or related matter.

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