Prejudgment Interest

KK TAKEAWAY:

When coverage is denied, prejudgment interest accrues from the date of loss.

KK TAKEAWAY:

When coverage is opened, prejudgment interest accrues from the date that payment was due according to the payment provision of the policy.

BACKGROUND:

Hawks Nest filed a Hurricane Irma claim. Dissatisfied with the speed of the claim investigation, Hawks Nest petitioned the trial court to compel appraisal. After the appraisal award and payment were issued, Hawks Nest sought and was granted summary judgment, including entitlement to fees and interest for the late payment on the appraisal award. However, the trial court denied the claim for prejudgment interest from the date of loss.

Hawks Nest appealed, claiming entitlement to prejudgment interest from the date of loss due to delay and failure to respond to the sworn proof of loss within 30 days. The Third District explained within its opinion that prejudgment interest attaches to the date of loss when coverage is denied. In this instance, the speed at which the claim investigation moved was not a denial but a delay. Appraisal, although compelled by Hawks Nest, is a contractual process for adjusting the value of the loss and is not a denial of coverage. Where a carrier pays within the time permitted under the contract, there is no basis to support that an insured suffered a pecuniary loss. Delay is not a denial, absent statutory or contractual provisions otherwise.