NOTE: The format of the AAIS Advisory has changed, starting in June 2012. Notices are now posted individually as they arise, then combined in a periodic email message.
The Florida Supreme Court recently issued a ruling that an insurer could still enforce the terms of a hurricane deductible even if its disclosure of the deductible did not precisely follow state-mandated specifications.
Florida law requires property insurance policies with hurricane deductibles to include the following disclosure in boldfaced type 18 points or larger: "This policy contains a separate deductible for hurricane losses, which may result in high out-of-pocket expenses to you."
In the case at issue, a policy written for a condominium association included a disclosure that used a slightly smaller font than required (16.2 points) and used the word “windstorm” instead of “hurricane.”
Regarding the disclosure, the court ruled that, even though the insurer did not meet the precise letter of the notice specifications, " the policy at issue . . . substantially complied with the statutory requirements by including the required notice on the first page . . . in all capital letters in a larger size font . . ."
The court added that, "there is nothing in . . . [the law indicating] . . . that the legislature intended an insured to have a private right of action against an insurer for failure to follow the notice requirements. Nor does the legislative history contain any guidance of whether the Legislature intended to create a private cause of action for the section's violation."
AAIS Advisory notices are posted periodically to announce AAIS product developments, and to provide news items that are relevant to our program users. Advisory notices are news summaries that paraphrase documents which should be consulted directly for complete, authoritative information.