SDV Insights

As Florida insurers continue their attempts to narrow protections for policyholders, it is imperative - now more than ever - that insureds be well-informed and know their rights. Most recently, in Florida, insurers are attempting to weaponize the death of Senate Bill 1726 and House Bill 1287 to limit the documents disclosed to policyholders. Specifically, the proposed bill, which required insurers to disclose their claims file to policyholders, hoped to thwart insurers from utilizing “claims file privilege” to obstruct justice for policyholders and help level the playing field. The goal of the proposed bill was to promote transparency of the claim adjustment process and undercut insurers’ attempts to dodge discovery of relevant and necessary information during litigation, forcing the insurers to fully and honestly justify their basis for withholding coverage . Unfortunately for policyholders, on March 8, 2024, the proposed legislation was not passed by the Insurance and Banking Subcommittee. 

While insurers want you to believe this is a significant victory and a free pass to continue withholding documents under a “claims file privilege,” this is not the case. The proposed bill merely codified current Florida law – simply put, the “claims file privilege” never existed, and still does not.

Indeed, the “claims file privilege” is not codified or rooted in Florida jurisprudence. Nevertheless, Florida insurers routinely utilize the phrase “claims file privilege” as a basis to withhold discovery of policyholders’ claims files and stonewall meaningful and necessary fact investigation. The “claims file privilege” and related arguments inevitably crop up during most insurance coverage disputes in Florida.

Insurers base their tenuous claim for application of a “claims file privilege” on Florida case law asserting that an insurer’s claims file is generally not discoverable. To support their position, Insurers have attempted to disguise the Work Product Doctrine in palatable, but disingenuous, language. This issue is discussed at great length by the Eleventh Judicial Circuit Court in Udelson v. Nationwide Ins. Co. of Fla., Pepper Eng’g Grp., Inc., & Fed. Ins. Co., 20 Fla. L. Weekly Supp. 1176a (2013). The c ourt analyzed the “claims file privilege” and Work Product Doctrine when policyholders brought forth a motion to compel the insurers’ claims file. The court decided the following:

“documents in an insurance carrier's file -- like documents in any litigant's file -- that are relevant or reasonably calculated to lead to the discovery of admissible evidence are discoverable unless, and only unless, privileged. It makes no difference whether the document in the insurer's file is an ‘activity log,’ ‘claims manual,’ ‘photograph’ of the damaged property, or anything else. Nor does it matter how the material is labeled by the carrier, or where it is located within the insurer's ‘file.’ Such material is protected by the work product privilege if, and only if, it is prepared ‘in anticipation of litigation.’ The law, quite simply, does not recognize a “claims file” privilege.”¹

Based on this analysis, the Court held in favor of policyholders, requiring the insurers to disclose documents created and used in the “adjustment of the claim” because the adjustment process was an activity required by the policy and occurred in the ordinary course of business, taking it outside the protection of the Work Product Doctrine. The Court, importantly, recognized that while different courts in Florida applied different standards to determine when litigation was anticipated, they did so in the context of the Work Product Doctrine, and not the fictious “claims file privilege.” 

Florida’s Third District Court of Appeals also addressed this issue in Homeowners Choice Prop. and Cas. Ins. Co. v. Avila,²  explicitly recognizing that there is no claims file privilege. In Avila, the court grappled with the discoverability of a claims file in a breach of contract claim, which the insurer refused to disclose in discovery. The court determined that in breach of contract disputes, a claims file may not be relevant, while in bad faith litigation, or where an insurer’s conduct is at issue, the claims file may be relevant and subject to disclosure. The Court ultimately decided that the documents were protected under the Work Product Doctrine, not “claims file privilege.”

Likewise, the Fifth District Court of Appeal reached a similar conclusion in Avatar Property & Casualty Ins. Co. v. Simmons,³  finding that the insurer was required to produce photographs within its claims file as Avatar failed to prove they were protected by the Work Product Doctrine. Avatar attempted to insert objections made by Simmons for videos and photographs, as well as a request for the underwriting file, claiming they were in the claims file and, therefore, work product. The court observed that “Even if ... a ‘claims file’ is work product, it is not necessarily true that every document in a claim file is work product. Putting a document in a claim file doesn't make it immune; it is only immune if it is work product.”⁴

While the proposed bill contained many protections for policyholders – such as affirmatively requiring insurers to notify policyholders or the policyholder’s representatives that they may, upon request, obtain copies of all claim-related documents and putting a fifteen (15) day deadline to respond to requests for the same – the purpose and substance of the bill is already controlling Florida law. The biggest advantage of codifying the current law is that it would have allowed policyholders to make claims file requests outside of litigation. While the insurers would still be able to withhold privileged documents under the bill, they would have been required to provide notice to the policyholder that purportedly privileged documents were withheld.  

With Florida insurance law constantly evolving, it is important to fully understand your rights as a policyholder. As you can see, things are not always as they appear. Policyholders should consider consulting experienced attorneys regarding their rights early and often as insurers continue to succeed with their lobbying efforts.

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¹Udelson v. Nationwide Ins. Co. of Fla., Pepper Eng’g Grp., Inc., & Fed. Ins. Co., 20 Fla. L. Weekly Supp. 1176a (2013).
²Homeowners Choice Prop. and Cas. Ins. Co. v. Avila, 248 So. 3d 180 (Fla. 3d DCA 2018).
³Avatar Property & Casualty Ins. Co. v. Simmons, 298 So.3d 1252 (Fla. 5th DCA 2020).
⁴Id.