Florida Appellate Court Finds Water Damage Sub-limit Ambiguous And Includes Tear-Out Costs

A Florida appellate court affirmed summary judgment entered in favor of insureds after determining that the policy wording applicable to the loss was ambiguous. Security First Ins. Co. v. Vazquez, No. 5D20-2528, 2022 Fla. App. LEXIS 1205, 47 Fla. L. Weekly D487b (Fla. 5th DCA, Feb. 18, 2022).

The insureds reported water damage to their insurer following the failure of a cast iron plumbing system. The insurer accepted coverage for the claim and issued payment pursuant to the policy’s limited water damage endorsement sub-limit. The insureds, however, filed suit alleging that they were owed the costs to tear out the concrete in order to access and repair the damaged plumbing. The parties filed cross-motions for summary judgment on whether the limited water damage endorsement sub-limit included the access costs. The trial court entered judgment in favor of the insureds.

On appeal, the insureds argued that the endorsement was ambiguous as to coverage for the tear-out costs and the sub-limit did not apply to those costs. The insurer countered that the tear-out costs were necessarily a part of the water damage claim and were, therefore, included within the endorsement’s sub-limit. The court concluded that the policy should have expressly stated that the tear-out costs were subject to the water damage endorsement sub-limit and that because the endorsement could reasonably be interpreted in each party’s favor, affirmed summary judgment in favor of the insureds.