December 28, 2019

Property Insurance / Actual Cash Value / Matching Costs

Senior counsel Rollie Goss has written a case note, “Property Insurance / Actual Cash Value / Matching Costs,” published in the December 28, 2019, issue of the Insurance Litigation Reporter. The case, in Florida’s Third District Court of Appeal, is Vazquez v. Citizens Property Insurance Corp., __ So. 3d __, 2019 WL 5406523 (Oct. 23, 2019).

Water intrusion damaged one cabinet and twelve ceramic tiles in Ms. Vazquez’s home. She contended that her homeowners’ insurer had to pay to replace not only the damaged cabinets and tile, but also the undamaged cabinets and tile, so that after repairs were completed all visually matched. The cost of the replacement of undamaged property so that all property visually matches after repairs is known in Florida as “matching costs.” The appellate court affirmed the holding of the trial court that matching costs were not compensable under the actual cash value coverage of the policy, which obligated the insurer to pay only the actual cash value of the property that had sustained direct physical loss, and any covered additional costs necessary to make repairs only as such work was performed and costs were incurred by Ms. Vazquez.

Whether this opinion precludes Ms. Vazquez from recovering matching costs is unclear. The court of appeal stated that the trial court “clarified that its ruling did not preclude Ms. Vazquez from claiming that she was entitled to recover matching costs in a separate lawsuit,” implying that this could just be a question of timing. The court of appeal also stated that “the plain language of the statutes and the policy clearly require the insurer to pay any remaining amounts once the repairs are made.” This dispute may not be over if Ms. Vazquez proceeds to replace all of the cabinets and floor tile at her own expense and then claims the amounts that she has paid for such “repairs” as matching costs under the policy and the statute.

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