Florida Appeals Court Approves Trial for Water Damage Insurance Dispute Against Citizens
Citizens, the insurer of last resort in Florida, is facing a lawsuit over a water damage claim.
This past week, a Florida appeals court ruled the water damage claim should proceed to trial, despite having initially been dismissed by a trial court.
The claim involves a dispute over when water damage occurred and how much water damage the insurer should cover.
In July 2019, Miguel Betancourt and Ana Diaz discovered water damage in multiple areas of their Miami-Dade County property.
The two homeowners called a public adjuster to inspect the water damage. Then, they decided to file a claim with Citizens Property Insurance Corporation.
As reported by Insurance Business Mag, Citizens investigated the claim and denied it, claiming the damage was caused by a “historic leak.”
Since then, the homeowners have gone back and forth with Citizens. Ultimately, unable to resolve the issue on their own, the two parties are proceeding to trial.
How Homeowners Fought Back Against Denied Insurance Claim
Homeowners Miguel Betancourt and Ana Diaz started by hiring a public adjuster.
The public adjuster analyzed the water damage and decided to file a claim with Citizens, arguing the damage should be covered under the homeowners’ existing Citizens insurance policy.
Citizens inspected the damage and hired a hygienist. The hygienist argued there was pre-existing damage to the shower and bathtub that had been causing problems for two months. Because it was a “historic leak,” this pre-existing damage would not be covered.
Miguel Betancourt and Ana Diaz sued Citizens for breach of contract.
Citizens responded by arguing there was no proof showing when the damage occurred, using the hygienist’s affidavit as justification for denying the claim for pre-existing damage.
Unsatisfied, Betancourt and Diaz fought back by hiring a licensed engineer. That engineer inspected their Miami-Dade County home.
According to the engineer, it was possible the leak began before July 2019. However, there was no evidence that the leak pre-existed October 2018, which is when the homeowners first purchased the Citizens policy.
As proof, the engineer cited a lack of evidence for long-term water damage: there were no signs of water intrusion, rotted wood, swollen drywall, or large-scale mold growth, for example – all of which would typically be present for water damage exceeding the start of the Citizens insurance policy.
Trial Court Sides with Citizens Before Appeals Court Reverses the Decision
A trial court sided with Citizens, finding the engineer’s report did not adequately challenge Citizens’ evidence. The case seemed closed.
In early March 2025, however, Florida’s Third District Court of Appeal reversed the decision of the lower court. Unlike the trial court, the appeals court found the engineer’s report was sufficient evidence to challenge Citizens’ own expert.
According to the appeals court, the engineer’s report wasn’t conclusory or insufficient; instead, it raised legitimate questions about the source and nature of the water damage. The engineer presented genuine facts instead of relying on mere speculation, contrary to what the trial court had initially found.
The case will return to the Miami-Dade Circuit Court, where a jury will analyze testimony and determine when water damage occurred and whether or not Citizens is obligated to cover the claim based on that information.
How Insurance Covers Water Damage
A standard homeowners insurance policy covers water damage. However, it doesn’t automatically cover all types of water damage.
Here’s what you need to know about how insurance covers water damage:
- Homeowners insurance is designed to cover sudden and unexpected damages – like burst pipes and other sudden water events.
- Homeowners insurance does not, however, cover expected parts of homeownership, like wear and tear-related issues and maintenance. If you ignored leaky pipes and other water-related issues for years, for example, then your insurer could deny your claim.
- A standard homeowners insurance policy does not cover flooding. If rising waters damage your home, your homeowners insurance will not provide compensation unless you have previously purchased an additional flood insurance policy.
- Homeowners insurance may cover leaky pipes and slower water damage over time. However, homeowners may need to provide proof that the water damage occurred within a certain period – say, after the start of the insurance policy.
Understandably, water damage claims often lead to disputes. It’s difficult for homeowners to prove water damage was sudden and unexpected. But at the same time, it’s difficult for insurers to prove exactly when the water damage began.
What It Means for Other Policyholders
According to the Insurance Information Institute, 28% of all homeowners insurance claims in the United States involve water damage.
The battle between Betancourt, Diaz, and Citizens highlights the importance of fighting back against insurance companies, even after a denied water damage claim.
Miguel Betancourt and Ana Diaz started by hiring a public adjuster to review their claim. The public adjuster, using their expertise, decided it was in their best interest to proceed with a claim.
After Citizens denied their claim, Miguel Betancourt and Ana Diaz continued to fight by ordering an engineer’s report.
That engineer’s report–depending on the outcome of the trial–could overturn the denied claim, forcing Citizens to pay the two Florida homeowners compensation and give them the outcome they’re looking for.
