Tear-Out Costs Get Torn Out Again

On September 13, 2023, the Third District Court of Appeal released its opinion in People's Trust Insurance Company v. Banks.¹ The opinion is a substitute opinion for the Court's original opinion, which was issued on August 13, 2023.² The sole issue for the Court's decision was whether a "limited water damage endorsement," which contained a sub-limit of $10,000 for all damages caused by water, included the cost to tear out portions of the property necessary to access the failed drain plumbing line in order to repair the line. The Court aligned itself with the Fourth and Fifth Districts and a majority of Florida federal courts and held that tear-out costs were included within the sub-limit.³ Therefore, upon payment of the $10,000 sub-limit, the insurance company's obligations ended.