Thursday, January 7, 2010

Insured Must Pursue Administrative Remedies Pre-Suit In Windstorm Mitigation Discount Action

In Serchay v. State Farm Insurance Company (4D08-4031), the Fourth District held that an insured must pursue administrative remedies prior to a court action when the "insured homeowner, [] does not receive from his insurer a statutorily-mandated premium discount for having a windstorm-mitigating hip roof."  The court stated:
The statutorily-mandated premium discount appears in sections 627.0629 and 627.711, Florida Statutes (2007)......The plaintiff sued his homeowner’s insurer, State Farm, in circuit court, alleging in various causes of action that State Farm violated sections 627.0629 and 627.711. The plaintiff alleged that his home has a windstorm-mitigating hip roof for which the State of Florida requires insurers to provide a premium discount to their insureds. The plaintiff further alleged that State Farm did not notify him of his right to receive the discount, or provide him with the discount. Instead, according to the plaintiff, State Farm required its insureds to complete an inspectorcertified windstorm survey to be entitled to the discount. The plaintiff sought to recover the discount, and to enjoin State Farm from allegedly continuing to violate the aforementioned statutes. The plaintiff also sought class action relief on behalf of all other similarly situated State Farm policyholders.
State Farm moved to dismiss. State Farm alleged that the plaintiff failed to exhaust his administrative remedies under section 627.371, Florida Statutes (2007)......In a thorough order, the circuit court dismissed the suit on the ground that the plaintiff failed to exhaust his administrative remedies under section 627.371.
The plaintiff argues that section 627.371 does not apply here because this case is not about “ratemaking” and his complaint does not challenge State Farm’s rates. Rather, the plaintiff contends his action concerns State Farm’s failure to provide the statutorily-mandated premium discount.
The court disagreed with the plaintiff/appellant and held:
We understand the distinction which the plaintiff makes between ratemaking and premium discounts. Nevertheless, we hold that a premium discount is inextricably linked to the rate charged and, therefore, section 627.371 applies to the plaintiff’s action. An examination of the relevant statutes supports this holding.


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