Acceptance of Insurance Payment without Reservation is a Full Settlment of Insurance Claim

United Property and Casualty Insurance Co. v. Armando Valladares, (Fla. 3DCA No. 3D10-2706 October 19, 2011)

In United Property and Casualty Insurance Co. v. Armando Valladares, (Fla. 3DCA No. 3D10-2706 October 19, 2011), the Florida Third District Court of Appeal held that a homeowner’s acceptance of an insurance settlement payment from the insurance company without reservation or objection, acted as accord and satisfaction for the entire insurance claim. In this particular case, the homeowner had a broken pipe that caused water damages to his home. The insurance company denied that the damages were covered under the insurance policy. Later, the insurance company issued a settlement check for the insurance claim involving the broken pipe and the homeowner accepted and deposited the same without objection or reservation. Afterwards, the homeowner filed a lawsuit against the insurance company claiming breach of contract for failing to pay for all damages as a result of the broken pipe, including loss of use. The insurance company argued that the insurance claim was previously settled when the homeowner accepted the settlement check. The Third District Court of Appeal agreed with the insurance company finding that the homeowner accepted a settlement from the insurance company for the sole pending insurance claim between them without objecting to the amount or reserving their rights to make claims for additional damages. The Third District Court of Appeal reasoned that the entire claim had been settled by the acceptance of the previous payment since the homeowner was not alleging additional damages, losses or facts that were not part of the original claim.

As a result of this case, Florida homeowners/insureds and Florida public adjusters are cautioned to make a written objection or reservation to any partial payment or settlment made by an insurance company. Failing to document an objection or reservation of rights as to additional or other damages could allow the insurance company to argue that the entire insurance claim was settled by the partial payment. A written objection or reservation should be communicated to the insurance company prior to the issuance and acceptance of any check so the insurance company knows in advance that the payment is not a complete payment for all damages. A written objection is to document disputed damage amounts while a written reservation is to document what is not included in the partial payment (personal property, additional living expense, loss of use, other parts of the home, etc.). A Florida homeowner or Florida Public Adjuster could document an objection or reservation in its written communications with the insurance company and its adjuster prior to the partial payment being made. Further, a Florida Public Adjuster could implement language in its form packages, demands or estimates to also preserve such objections and reservations.

About the Author: Patrick Russell, Esq. is a Florida insurance lawyer with Russell Law who has handled countless Florida insurance claims on behalf of homeowners and insureds against their insurance companies. If you have not been paid in full for all of your damages as a result of a Florida insurance claim or if the insurance company has improperly denied your insurance claim entirely, please contact us for help. Insurance companies have legions of lawyers helping them to deny your payment, even those odds by getting a Florida insurance lawyer on your side. To discuss your Florida insurance claim, feel free to call or contact us by email .

Leave a Reply Cancel reply