In a recent property insurance coverage dispute, an issue on appeal pertained to the “prejudice” jury instruction associated with the insured’s failure to comply with post-loss policy conditions. The trial court found that the prejudice only pertained to prompt notice and not other post-loss policy conditions. This was reversed on appeal as prejudice applied to ALL the post loss policy conditions that the insured failed to comply with, not just the prompt notice requirement. The prejudice presumption applies to all affirmative defenses regarding an insured’s failure to comply with post-loss policy conditions.
Consider this discussion when dealing with an insurer raising prejudice as an affirmative defense to do an insured’s failure to comply with post-loss policy conditions, and the associated burdens of proof:
On appeal, [the insurer] contends the trial court erred by instructing the jury that the presumption of prejudice was inapplicable to all of its post-loss obligation defenses except prompt notice. We agree.
This Court addressed the issue of which party bears the burden to demonstrate whether the insurer was prejudiced by its insured’s material failure to satisfy a post-loss provision in American Integrity Ins. Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019). In Estrada, we held that “when an insurer has alleged, as an affirmative defense to coverage, and thereafter has subsequently established, that an insured has failed to substantially comply with a contractually mandated post-loss obligation, prejudice to the insurer from the insured’s material breach is presumed, and the burden then shifts to the insured to show that any breach of post-loss obligations did not prejudice the insurer.” Id. at 916. In reversing the trial court, we instructed, “If American Integrity establishes that Estrada failed to materially satisfy any contractually mandated post-loss obligations, then the burden shifts to Estrada to establish that American Integrity was not prejudiced by Estrada’s breach.” Id. at 917 (emphasis added).
In the instant case, [the insurer] alleged as an affirmative defense that [the insured] failed to substantially comply with the contractually mandated post-loss obligation. In support of its affirmative defense, [the insurer] provided as evidence the document request letter it sent to [the insured] and her attorney requesting a sworn proof of loss, repair receipts, proof of repairs from [the insured’s] prior 2019 water damage claim, and more. [The insurer’s] corporate representative testified the requested documents were never received. This evidence was buttressed by [the insured’s] own testimony admitting she was aware [the insurer] requested documents and that she did not provide them. She further confirmed that her uncle purchased materials and made repairs to the roof before [the insurer] inspected it. The evidence adduced at trial was sufficient to have required the trial court to instruct the jury on [the insurer’s] presumption of prejudice to all its post-loss obligation defenses.
The trial court failed to properly instruct the jury. Instead it instructed the jury that the legal presumption of prejudice was inapplicable to all [the insurer’s] post-loss obligation defenses except prompt notice. Because the instruction was an inaccurate statement of the law, the trial court committed reversible error.
Universal Property & Casualty Ins. Co. v. Alvarez, 51 Fla. L. Weekly D973a (Fla. 3d DCA 2026) (internal citations omitted).
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.