The 2023 Florida Statutes (including Special Session C)

Title XXXVII
INSURANCE

Chapter 627
INSURANCE RATES AND CONTRACTS

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F.S. 627.7011

627.7011 Homeowners’ policies; offer of replacement cost coverage and law and ordinance coverage.—

(1) Prior to issuing a homeowner’s insurance policy, the insurer must offer each of the following:

(a) A policy or endorsement providing that any loss that is repaired or replaced will be adjusted on the basis of replacement costs to the dwelling not exceeding policy limits, rather than actual cash value, but not including costs necessary to meet applicable laws and ordinances regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris.

(b) A policy or endorsement providing that, subject to other policy provisions, any loss that is repaired or replaced at any location will be adjusted on the basis of replacement costs to the dwelling not exceeding policy limits, rather than actual cash value, and also including costs necessary to meet applicable laws and ordinances regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris. However, additional costs necessary to meet applicable laws and ordinances may be limited to 25 percent or 50 percent of the dwelling limit, as selected by the policyholder, and such coverage applies only to repairs of the damaged portion of the structure unless the total damage to the structure exceeds 50 percent of the replacement cost of the structure.

An insurer is not required to make the offers required by this subsection with respect to the issuance or renewal of a homeowner’s policy that contains the provisions specified in paragraph (b) for law and ordinance coverage limited to 25 percent of the dwelling limit, except that the insurer must offer the law and ordinance coverage limited to 50 percent of the dwelling limit. This subsection does not prohibit the offer of a guaranteed replacement cost policy.

(2) Unless the insurer obtains the policyholder’s written refusal of the policies or endorsements specified in subsection (1), any policy covering the dwelling is deemed to include the law and ordinance coverage limited to 25 percent of the dwelling limit. The rejection or selection of alternative coverage shall be made on a form approved by the office. The form must fully advise the applicant of the nature of the coverage being rejected. If this form is signed by a named insured, it is conclusively presumed that there was an informed, knowing rejection of the coverage or election of the alternative coverage on behalf of all insureds. Unless the policyholder requests in writing the coverage specified in this section, it need not be provided in or supplemental to any other policy that renews, insures, extends, changes, supersedes, or replaces an existing policy if the policyholder has rejected the coverage specified in this section or has selected alternative coverage. The insurer must provide the policyholder with notice of the availability of such coverage in a form approved by the office at least once every 3 years. The failure to provide such notice constitutes a violation of this code, but does not affect the coverage provided under the policy.

(3) In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs:

(a) For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible. The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. However, if a roof deductible under s. 627.701(10) is applied to the insured loss, the insurer may limit the claim payment as to the roof to the actual cash value of the loss to the roof until the insurer receives reasonable proof of payment by the policyholder of the roof deductible. Reasonable proof of payment includes a canceled check, money order receipt, credit card statement, or copy of an executed installment plan contract or other financing arrangement that requires full payment of the deductible over time. If a total loss of a dwelling occurs, the insurer must pay the replacement cost coverage without reservation or holdback of any depreciation in value, pursuant to s. 627.702.

(b) For personal property:

1. The insurer must offer coverage under which the insurer is obligated to pay the replacement cost without reservation or holdback for any depreciation in value, whether or not the insured replaces the property.

2. The insurer may also offer coverage under which the insurer may limit the initial payment to the actual cash value of the personal property to be replaced, require the insured to provide receipts for the purchase of the property financed by the initial payment, use such receipts to make the next payment requested by the insured for the replacement of insured property, and continue this process until the insured remits all receipts up to the policy limits for replacement costs. The insurer must provide clear notice of this process before the policy is bound. A policyholder must be provided an actuarially reasonable premium credit or discount for this coverage. The insurer may not require the policyholder to advance payment for the replaced property.

(4)(a) An insurer that issues a homeowner’s insurance policy must include with the policy documents at initial issuance and every renewal, in bold type no smaller than 18 points, the following statement:

“LAW AND ORDINANCE: LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE THAT YOU MAY WISH TO PURCHASE. PLEASE DISCUSS WITH YOUR INSURANCE AGENT.”

¹(b) An insurer that issues a homeowner’s insurance policy that does not provide flood insurance coverage must include on the policy declarations page at initial issuance and every renewal, in bold type no smaller than 18 points, the following statement:

“FLOOD INSURANCE: YOU SHOULD CONSIDER THE PURCHASE OF FLOOD INSURANCE. YOUR HOMEOWNER’S INSURANCE POLICY DOES NOT INCLUDE COVERAGE FOR DAMAGE RESULTING FROM FLOOD EVEN IF HURRICANE WINDS AND RAIN CAUSED THE FLOOD TO OCCUR. WITHOUT SEPARATE FLOOD INSURANCE COVERAGE, YOUR UNCOVERED LOSSES CAUSED BY FLOOD ARE NOT COVERED. PLEASE DISCUSS THE NEED TO PURCHASE SEPARATE FLOOD INSURANCE COVERAGE WITH YOUR INSURANCE AGENT.”

(c) The intent of this subsection is to encourage policyholders to purchase sufficient coverage to protect them in case events excluded from the standard homeowners policy, such as law and ordinance enforcement and flood, combine with covered events to produce damage or loss to the insured property. The intent is also to encourage policyholders to discuss these issues with their insurance agent.

(5)(a) As used in this subsection, the term “authorized inspector” means an inspector who is approved by the insurer and who is:

1. A home inspector licensed under s. 468.8314;

2. A building code inspector certified under s. 468.607;

3. A general, building, or residential contractor licensed under s. 489.111;

4. A professional engineer licensed under s. 471.015;

5. A professional architect licensed under s. 481.213; or

6. Any other individual or entity recognized by the insurer as possessing the necessary qualifications to properly complete a general inspection of a residential structure insured with a homeowner’s insurance policy.

(b) An insurer may not refuse to issue or refuse to renew a homeowner’s policy insuring a residential structure with a roof that is less than 15 years old solely because of the age of the roof.

(c) For a roof that is at least 15 years old, an insurer must allow a homeowner to have a roof inspection performed by an authorized inspector at the homeowner’s expense before requiring the replacement of the roof of a residential structure as a condition of issuing or renewing a homeowner’s insurance policy. The insurer may not refuse to issue or refuse to renew a homeowner’s insurance policy solely because of roof age if an inspection of the roof of the residential structure performed by an authorized inspector indicates that the roof has 5 years or more of useful life remaining.

(d) For purposes of this subsection, a roof’s age shall be calculated using the last date on which 100 percent of the roof’s surface area was built or replaced in accordance with the building code in effect at that time or the initial date of a partial roof replacement when subsequent partial roof builds or replacements were completed that resulted in 100 percent of the roof’s surface area being built or replaced.

(e) This subsection applies to homeowners’ insurance policies issued or renewed on or after July 1, 2022.

(6) This section does not:

(a) Apply to policies not considered to be “homeowners’ policies,” as that term is commonly understood in the insurance industry.

(b) Apply to mobile home policies.

(c) Limit the ability of an insurer to reject or nonrenew any insured or applicant on the grounds that the structure does not meet underwriting criteria applicable to replacement cost or law and ordinance policies or for other lawful reasons.

(d) Prohibit an insurer from limiting its liability under a policy or endorsement providing that loss will be adjusted on the basis of replacement costs to the lesser of:

1. The limit of liability shown on the policy declarations page;

2. The reasonable and necessary cost to repair the damaged, destroyed, or stolen covered property; or

3. The reasonable and necessary cost to replace the damaged, destroyed, or stolen covered property.

(e) Prohibit an insurer from exercising its right to repair damaged property in compliance with its policy and s. 627.702(7).

History.—s. 17, ch. 93-410; s. 1184, ch. 2003-261; s. 14, ch. 2005-111; s. 23, ch. 2006-12; s. 4, ch. 2009-87; s. 19, ch. 2011-39; s. 1, ch. 2018-63; s. 1, ch. 2019-82; s. 14, ch. 2022-268; s. 14, ch. 2022-271.

¹Note.—Section 23, ch. 2023-172, provides that “[c]hapter 2022-271, Laws of Florida, shall not be construed to impair any right under an insurance contract in effect on or before the effective date of that chapter law. To the extent that chapter 2022-271, Laws of Florida, affects a right under an insurance contract, that chapter law applies to an insurance contract issued or renewed after the applicable effective date provided by the chapter law. This section is intended to clarify existing law and is remedial in nature.”

F.S. 627.7011 on Google Scholar

F.S. 627.7011 on Casetext

Amendments to 627.7011

Arrestable Offenses / Crimes under Fla. Stat. 627.7011

Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 627.7011.

Annotations, Discussions, Cases:

Cases from cite.case.law:

C. GANZEMULLER R. v. OMEGA INSURANCE COMPANY,, 244 So. 3d 1189 (Fla. App. Ct. 2018)

. . . They argue that subsection 627.7011(5)(e), Florida Statutes (2015), which references subsection 627.702 . . . The issue on appeal is whether subsections 627.7011(5)(e) and 627.702(7) relieve the Ganzemullers and . . . As discussed previously, section 627.7011 specifies those things that an insurer must offer prior to . . . Subsection (5)(e) makes clear that section 627.7011 does not "[p]rohibit an insurer from exercising its . . . right to repair damaged property in compliance with its policy and s. 627.702(7)." § 627.7011(5)(e). . . .

VAZQUEZ v. SOUTHERN FIDELITY PROPERTY CASUALTY, INC., 230 So. 3d 1242 (Fla. Dist. Ct. App. 2017)

. . . Based on the 2011 amendments to section 627.7011(3), Florida Statutes, if the homeowner files a claim . . . Section 627.7011(3) requires payment of actual cash value—not merely the insurance company’s estimate . . .

ESCOBAR, v. TOWER HILL SIGNATURE INSURANCE COMPANY,, 226 So. 3d 1084 (Fla. Dist. Ct. App. 2017)

. . . See § 627.7011(3)(a), Fla. . . .

ZAMORA P. v. TOWER HILL PRIME INSURANCE COMPANY,, 226 So. 3d 1085 (Fla. Dist. Ct. App. 2017)

. . . See § 627.7011(3)(a), Fla. Stat. (2016); Siegel v. Tower Hill Signature Ins. . . .

SIEGEL v. TOWER HILL SIGNATURE INSURANCE COMPANY,, 225 So. 3d 974 (Fla. Dist. Ct. App. 2017)

. . . Section 627.7011(3)(a), Florida Statutes (2017), sets a minimum amount for initial payments made pursuant . . . and in the Seigels’ policy, standing alone, would violate the initial payment requirement in section 627.7011 . . . This is plainly not so since Slayton explicitly declined to address the payment requirement in section 627.7011 . . . Slayton argued on appeal .that the loss settlement provision above violated section 627.7011, Florida . . . depreciation in value, whether or not the insured replaces or repairs the dwelling or property.” § 627.7011 . . .

FRANCIS, v. TOWER HILL PRIME INSURANCE COMPANY,, 224 So. 3d 259 (Fla. Dist. Ct. App. 2017)

. . . unlike the case before us, Slayton had failed to preserve the argument that the insurer violated section 627.7011 . . .

NOA, v. FLORIDA INSURANCE GUARANTY ASSOCIATION,, 215 So. 3d 141 (Fla. Dist. Ct. App. 2017)

. . . .” § 627.7011(l)(b), Fla. Stat. (2011). . . .

PREPARED INSURANCE COMPANY, v. GAL,, 209 So. 3d 14 (Fla. Dist. Ct. App. 2016)

. . . See § 627.7011(6)(b), Fla. Stat. (2010) (amended 2011) (emphasis added). . . . (citing § 627.7011(6), Fla. Stat. (2008)). . . .

R. ALLEN, Z. J. A. v. USAA CASUALTY INSURANCE COMPANY, A A, 790 F.3d 1274 (11th Cir. 2015)

. . . Stat. § 627.7011(1). . . . Id. § 627.7011(2). . . . Stat. § 627.7011(2). . . . Stat. § 627.7011). . . . APPENDIX 627.7011. . . .

FLORIDA PENINSULA INSURANCE COMPANY, v. CESPEDES,, 161 So. 3d 581 (Fla. Dist. Ct. App. 2014)

. . . Section 627.7011(4), Florida Statutes (2008), required a policy to “include” a statement in bold type . . .

JUVONEN, v. UNITED PROPERTY AND CASUALTY INSURANCE COMPANY,, 124 So. 3d 976 (Fla. Dist. Ct. App. 2013)

. . . They argued that sections 627.7011(3) and 627.7011(6), Florida Statutes (2008), require those amounts . . . argues that Trinidad II does not apply because the supreme court interpreted the 2008 version of section 627.7011 . . . Although the 2008 version of section 627.7011 contains subsection (6), which the 2005 version did not . . .

HAYNES, v. UNIVERSAL PROPERTY AND CASUALTY INSURANCE COMPANY,, 120 So. 3d 651 (Fla. Dist. Ct. App. 2013)

. . . Section 627.7011(8), Florida Statutes (2008), provides that “[i]n the event of a loss for which a dwelling . . . The court examined the language of section 627.7011, Florida Statutes (2008), considered the legislative . . . actually incurred the expenses, and that a contrary interpretation of the policy would contravene section 627.7011 . . .

TRINIDAD, v. FLORIDA PENINSULA INSURANCE COMPANY,, 121 So. 3d 433 (Fla. 2013)

. . . Because section 627.7011, Florida Statutes (2008), and the replacement cost policy in this case, did . . . Trinidad, 99 So.3d at 505 (quoting § 627.7011(3), Fla. Stat. (2008)). . . . Although section 627.7011(3) provides that an insurer must pay replacement costs, section 627.7011(6) . . . See § 627.7011(6), Fla. Stat. (2008). . . . Section 627.7011, however, has since been amended, most recently in 2011. . . .

SLAYTON, v. UNIVERSAL PROPERTY AND CASUALTY INSURANCE COMPANY,, 103 So. 3d 934 (Fla. Dist. Ct. App. 2012)

. . . On appeal, Slayton argues that the provisions cited above violated section 627.7011, Florida Statutes . . . Specifically, section 627.7011(3) states: (3) In the event of a loss for which a dwelling or personal . . . Section 627.7011 was substantially altered by the legislature in 2011. . . .

TRINIDAD, v. FLORIDA PENINSULA INSURANCE COMPANY,, 99 So. 3d 502 (Fla. Dist. Ct. App. 2011)

. . . when payment is conditioned on an “actual cash value” basis, the Florida Legislature amended section 627.7011 . . . Our reading of section 627.7011(3), relating to depreciation holdbacks in replacement cost policies, . . . Payment for profit and overhead is not mentioned in section 627.7011, which requires payment of “replacement . . . holdback of any depreciation in value, whether or not the insured replaces or repairs the dwelling.” § 627.7011 . . .

SEGAL, v. HARTFORD INSURANCE COMPANY OF MIDWEST,, 334 F. App'x 948 (11th Cir. 2009)

. . . Florida Statute § 627.7011(3), which prohibits insurers from holding back the depreciation in value of . . . Stat. § 627.7011(3) into the policy, and thus the depreciation holdback clause is ■written out of the . . . Stat. § 627.7011(3). . . . Stat. § 627.7011(3) was a change made by Hartford. . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. MALLETT, 7 So. 3d 552 (Fla. Dist. Ct. App. 2009)

. . . See, e.g., § 627.7011(1)(b), Fla. Stat. (2004). . . . .