Yesterday’s decision from Florida’s First District Court of Appeal, Bailetti v. Universal Property & Casualty Insurance Company, 1 highlights an increasingly difficult hurdle for policyholders who claim their insurer breached the policy by underpaying a loss. While I criticize the ruling and disagree with the precedent it has created, this is an important case for all who are involved in Florida property insurance claims. It should be read carefully, as it provides practical lessons about what to do before filing a lawsuit.
The case arose from Hurricane Sally damage to a Pensacola home. The homeowners, Rodolfo Bailetti and Ana Saez, received a payment from Universal for $8,125.20 based on its field adjuster’s estimate. Their public adjuster believed the loss exceeded that figure by more than $100,000, but his estimate was never introduced into evidence at trial. The homeowners filed a breach of contract lawsuit about four months after receiving the actual cash value payment, before doing any significant repairs.
The appellate court affirmed a defense verdict for Universal, finding that the insureds failed to prove the company breached the contract when they filed suit. Universal had paid the actual cash value, or ACV, based on its adjuster’s estimate. Under section 627.7011(3)(a) of the Florida Statutes and the “Loss Settlement” clause in the policy, the insurer is required to initially pay the ACV of the insured loss, and then pay any remaining replacement cost amounts as repairs are performed and expenses are incurred.
The court reasoned that because Universal paid its ACV estimate and the homeowners provided no evidence at that time showing the actual cash value payment was insufficient and that no replacement cost benefits were due, there was no breach. Later estimates produced years after the loss and just before trial could not prove the insurer’s earlier actual cash value payment was inadequate when made.
In essence, the court held that the insurer meets its contractual obligation by paying at least one reasonable ACV estimate. Once that occurs, the burden shifts to the insured to demonstrate that the payment failed to reflect the full actual cash value loss. Without timely evidence showing that Universal’s ACV was too low, the court concluded that the policyholders could not prevail. The decision also relied on the court’s earlier opinion in Homeowners Choice v. Clark, reinforcing that a mere disagreement over the amount owed, unsupported by contemporaneous proof, does not establish a breach.
I do not agree with the outcome. The policy does not require a policyholder to rebuild or make repairs before being entitled to the full amount of actual cash value payment due under the contract. Many policyholders cannot begin repairs when the insurer’s payment is far too small to start the process. To require proof of incurred expenses or completed work before finding a breach places an unrealistic burden on homeowners, especially after a catastrophic loss. If a policyholder can prove that the insurer owes more money under the terms of the policy, that should be enough. Partial payments that are too low by an insurer, even at actual cash value, should not excuse the obligation to pay the full amount of the covered loss. If more is owed, and conditions precedent to recovery are met or waived, the insurer’s own underpayment, if proven to be an underpayment, should be enough.
Nevertheless, the Bailetti decision stands as an important lesson to policyholders and their attorneys that in Florida, courts are increasingly focused on the timing and sufficiency of proof when evaluating breach of contract claims. Filing suit before gathering solid evidence that the insurer’s payment failed to meet the ACV requirement can result in losing the case altogether, even if the insurer’s initial estimate was later shown to be deficient.
My suggestion is to write letters explaining the dispute and disagreement with evidence and reasons why the insurance company’s position is wrong. This should be done before filing suit. This is good practice commonly accomplished by all competent attorneys seeking to resolve the matter out of the courtroom.
Thought For The Day
“It is not only what we do, but also what we do not do, for which we are accountable.”
— Molière
1 Bailetti v. Universal Prop. & Cas. Ins. Co., No. 1D2024-1695 (Fla. 1st DCA Oct. 8, 2025).