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Thursday, December 14, 2006

Law - "Florida insurance law doesn't cover [Indiana] snowbirds" [Updated]

An AP story in the Bredenton Herald (FL) reports today:

TALLAHASSEE, Fla. - "Snowbirds" and other part-time Florida residents who insure their cars back home cannot make claims under Florida laws that may be more favorable to them than those in their own states, the state Supreme Court said Thursday.

The ruling applies to crashes or other damages that occur in Florida. It was unanimous, but Chief Justice R. Fred Lewis agreed only with its result. He wrote that the majority's sole reliance on where a policy is issued may result in unintended consequences.

The opinion quashed a 2nd District Court of Appeal decision to permit a lawsuit under Florida law against State Farm for a claim on an Indiana policy.

The Supreme Court said only Florida citizens, not visitors or part-time residents, can claim the benefits of Florida law under out-of-state insurance policies and only then if necessary to "promote a paramount public policy."

"Although Florida welcomes its many visitors, whether for short or extended stays, we cannot rewrite their out-of-state contracts," Justice Raoul Cantero wrote for the high court.

The decision will prevent Lake Wales residents Thomas and Margaret Roach, who were injured in 2001 while riding in a neighboring couple's Indiana-insured car, from suing State Farm for underinsured motorist compensation under Florida law.

Indiana law would prohibit them from recovering because it permits an offset of underinsured motorist coverage against claims paid under other types of coverage. Florida law does not permit offsets.

The Roaches previously accepted personal injury liability settlements from a second motorist involved in the crash and State Farm, which covered the car owned by the Indiana couple, Ivan and Betty Hodges. Mrs. Hodges was killed in the crash.

The Hodges were snowbirds who spend winters at their second home in Lake Wales, but that didn't make them Florida citizens, the high court found.

In a separate concurring opinion, Lewis wrote that he would consider the location of the risk being insured and the intentions of the parties to an insurance contract as well as where it is issued to determine if Florida law should apply.

Lewis was worried that using the majority's more rigid doctrine will result in other states' laws controlling automobile insurance contracts designed and intended to cover risks in Florida and to be governed by Florida's laws.

[Update] Here is the opinion: State Farm Mutual Automobile Insurance Company v. Margaret Roach, et.al.. It begins:
This case requires us to decide which state’s law applies when an automobile insurance contract is executed in another state, where the insureds permanently reside, but the insureds spend a substantial amount of time in Florida and the accident occurs here. In Roach v. State Farm Mutual Automobile Insurance Co., 892 So. 2d 1107, 1112 (Fla. 2d DCA 2004), the district court of appeal held that Florida’s public policy prohibited application of the lex loci contractus rule, which would apply the law of the state where the contract was executed. Instead, the court invalidated an exclusion contained in the policy that, although permitted in the state where the policy was executed, is not permissible under Florida law. The court then certified a question of great public importance.1 We accepted jurisdiction. See art. V, § 3(b)(4), Fla. Const. To clarify the issue presented, we rephrase the question as follows:
WHERE RESIDENTS OF ANOTHER STATE WHO RESIDE IN FLORIDA FOR SEVERAL MONTHS OF THE YEAR EXECUTE AN INSURANCE CONTRACT IN THAT STATE, MAY THEY INVOKE FLORIDA’S PUBLIC POLICY EXCEPTION TO THE RULE OF LEX LOCI CONTRACTUS TO INVALIDATE AN EXCLUSIONARY CLAUSE IN THE POLICY?
As explained below, we answer the question “no” because the public policy exception to the lex loci rule may only be invoked to protect permanent Florida residents. We quash the district court’s decision, which unduly expanded the exception to protect temporary residents.

Posted by Marcia Oddi on December 14, 2006 04:23 PM
Posted to General Law Related