Prejudgment interest on a loss payable under a First-Party Insurance Policy like a Homeowners Policy is governed by this general rule: Prejudgment interest on the loss is recoverable from the date payment is due under the provisions of the Insurance Policy, with one well-known exception. The exception applies once the First-Party Insurance Company denies all Coverage. Once it has denied all Coverage, the First-Party Insurance Company is treated by Insurance Law as though it had affirmatively waived the Policy's provision governing deferred payment. Thereafter, any payment of the loss by the First-Party Insurance Company attracts Prejudgment Interest accruing from the Date of the Loss.
In Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009), Mr. and Mrs. Tomas claimed Homeowners Insurance Coverage under their Homeowners Policy with North Pointe for a replacement of their marble kitchen floor. North Pointe denied all Coverage based on an Exclusion. Mr. and Mrs. Tomas "filed a petition to compel appraisal under the terms of the homeowners' policy.... North Pointe withdrew its previous denial of the claim, admitting coverage ...." Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009), attached Official Slipsheet Opinion at 2. The matter went to Appraisal, and a month after North Pointe paid the claim, "an appraisal award was entered in the amount of $115,899.52, including prejudgment interest from the date of the loss." Id.
The Florida Appellate Court recited the prevailing law which is summarized at the beginning of this post. Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009) at 3. The conclusion was not hard for the Appellate Court thereafter to reach:
Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009) at 4.
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