Florida Supreme Court Rules Replacement Cost Includes Contractor’s Profit

 Wednesday, July 24, 2013

 Insurance Journal

Florida’s high court has ruled that insurers under a 2008 law must pay a contractor’s overhead and profit as part of the expense of repairing a homeowner’s property despite the fact the repairs may not have been made. The Florida Supreme Court recently ruled in the case [Trinidad v. Florida Peninsula Insurance Company, SC11-1643], which involved a homeowner, Amado Trinidad, whose home was damaged in a fire in 2008. At the time, Trinidad had a homeowner’s policy from Florida Peninsula Insurance Co. that called for him to receive full replacement coverage in the event of any damage to his home. Under a replacement policy, insurers are liable to pay for damage to a home without taking into account any depreciation based on the home’s age, condition, value or other similar factors. By comparison, a policy that pays actual cash value for damages factors in those depreciation factors.