When your insurance company tells you that all or some of your property damage is excluded by the policy, they may refer to a portion of your policy that states that damage is not covered when it is long-term in nature, not the result of a storm, the product of neglect or poor maintenance, the result of constant or repeated seepage or leakage of water, or reported late, among many other reasons.
What the insurance company will not tell you is that they have the burden, when a lawsuit is filed against them, to prove that the damage is excluded under the insurance policy. In Florida, the burdens of proof in insurance coverage disputes are established by case law:
First, a policyholder (the property owner) has the initial burden to prove that the loss falls within the terms of the policy. In other words, the policyholder must merely show that the damage occurred during the policy period.
Next, the burden shifts to the insurance company to prove that the claim is excluded based on a specific policy provision. The insurance company must take the facts surrounding the policyholder’s claim and explain to the court precisely why the policy should exclude that specific damage based on a clear and unambiguous reading of the exclusion.
Only if there is an exception to an exclusion in the policy does the burden shift back to the policyholder. A lawsuit does not often present this issue, but if an insurance coverage dispute reaches this point, a knowledgeable attorney will be able to analyze the specific facts of your claim to argue why the exception should apply.
An intimidating denial letter from your insurance company, and ongoing litigation against your insurance company, may incorrectly make it seem like the policyholder has the burden to show that the exclusion should not apply. False. It is important for you, as a policyholder, to understand that when the insurance company tells you that your damage is not covered – the insurance company has to convince the judge or the jury that the policy exclusion bars your claim, not the other way around. The Property People will use their understanding of insurance policy interpretation and property damage law to advocate for you. The Property People will force the insurance company to justify their denial or underpayment in a court of law.