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What Is The Valued Policy Law?


When we discuss losses and property damage, we often talk about damage to a part of the structure. Perhaps a flood, wind damage, or fire damages a part of your home or business. But in catastrophic cases, the entire structure can be declared a total loss. When it is, that’s what Florida’s valued policy law comes into effect.

The Valued Policy Law

The law says that when any building is declared a total loss by the insurance company, that the insurer must pay the limits of the policy as damages. It cannot argue the value of the loss.

The law is designed to avoid a situation where property is a total loss—that is, someone has no home or no business at all—and the insurance company is arguing about what the value of the loss is. The law is designed to get catastrophic claims paid quickly and efficiently.

The law also recognizes that it would be extraordinarily difficult sometimes to value the damage, where property is a total loss—a large part of the structure has, presumably, been destroyed.

If your property is damaged by fire or lightning, you can obtain the full value of the policy, even if the property isn’t a total loss.

What Can the Insurance Company Argue?

Note that under the law, the insurer can still argue coverage—that is, it can contend that the cause of the loss isn’t a covered loss, or it can assert any other defense it may have—it just can’t argue with you about the value of loss, or the amount it owes, if in fact there is coverage and the property is a total loss.

There can be cases where the property is declared a total loss because of a combination of a covered cause, and an excluded cause. Where the two combine, for the law to take effect, the homeowner must demonstrate that the covered cause, by itself, would have led to the total loss of the property.

The law doesn’t require an insurance company to pay more than the face value of the policy. Additionally, the law doesn’t cover your personal property that may have been lost in the catastrophe.

The valued policy law takes precedence over all other parts of the policy that may conflict with it. In other words, an insurer can’t include language in a policy that limits, restricts or puts conditions on the valued policy law.

What’s a Total Loss?

The law doesn’t say what a “total loss” actually is, which would bring the law into effect for a homeowner.

Many courts have said that property will be a total loss where the damage is so severe, the property has lost its “identity.” There can also be a constructive total loss. For example, if property is still there, and still repairable, but some law or ordinance wouldn’t allow the building to be fully repaired.

Contact the Miami property damage insurance attorneys at Velasquez & Associates P.A. today if you have property that has been damaged for any reason.



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