Florida Homeowner Coverage And The Concurrent Loss Doctrine

Author: Nathan Berkeley

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December 1, 2017 4:49pm

In the aftermath of Hurricane Irma, Michael Grunwald of Politico authored an article examining the venal beginnings of America’s fastest-growing city, Cape Coral, Florida. Entitled “The Boomtown That Shouldn’t Exist,”[1] Mr. Grunwald’s describes Cape Coral’s city planning as non-existent, calling it the “least natural, worst-planned, craziest-growing piece of an unnatural, badly planned, crazy-growing state.” He goes on to describe Cape Coral as “a precarious civilization engineered out of a watery wilderness, a bewildering dreamscape forged by greed, flimflam and absurdly grandiose visions that somehow stumbled into heavily populated realities.”

Historically, many home-owner policies in low-lying coastal regions such as Cape Coral, have included water and water damage exclusions. While most policies provide for wind damage, flood damage was frequently excluded. These exclusions can lead to profuse amounts of litigation to determine coverage in the event of large-scale incidents such as hurricanes.

The Florida Supreme Court has recently provided guidance on this issue. In Sebo v. American Home Assurance Co., 208 So.3d 694 (Fla. 2016), an insured sought judgment against an insurer following damage to his home. The trial court found as a matter of fact, that the house suffered from water, wind, and defective construction.

In addressing this question, courts have developed two competing theories: the efficient proximate cause doctrine and concurring cause doctrine.

The efficient proximate cause doctrine provides where there is a concurrence of different perils, the efficient cause – the one that sets the others in motion – is the cause to which the loss is attributable. The concurrent cause doctrine provides that coverage may exist where an insured risk constitutes a concurrent cause of the loss even when it is not the prime or efficient cause.

In Sebo, the Florida Supreme Court concluded there was no reasonable way to distinguish the proximate cause of the insured’s property loss. As such, application of the efficient proximate cause doctrine was not feasible.

Citing Wallach v. Rosenberg, 527 So.2d 1386 (Fla. 3d DCA 1988), the Court held where weather perils combine with human negligence to cause loss, it seems logical and reasonable to find the loss covered by an all-risk policy even if one of the causes is excluded from coverage.

Florida courts have initially appeared reluctant to expand Sebo’s reach to non-weather related actions. United States District Court for the Southern District of Florida recently refused to extend the concurrent cause doctrine to a case involving a determination of whether insurance coverage extends to negligence claims in cases arising out of an assault and battery when the insurance policy in question contains an assault and battery exclusion. Doe v. Hudson Specialty Insurance Company, 2017 WL 979263 (S.D. Fla., 2017). In Doe, the Court instead relied on the language of the policy exclusions to determine that these exclusions extend to the negligence arising out of the assault and battery. Id. at 4.

While only time will tell if Cape Coral is a truly sustainable community, the Florida Supreme Court’s recent decision to apply the concurrent cause doctrine when determining causation of an insured’s loss, should go a long way in streamlining future insurance coverage disputes in these high risks areas.

[1] https://www.politico.com/magazine/story/2017/10/20/fastest-growing-city-america-florida-cape-coral-215724

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