Florida courts continue to wrestle with a deceptively simple question: What happens to replacement cost coverage when an insurer denies a claim outright and forces the policyholder into court? The Sixth District Court of Appeal’s decision yesterday in Universal Property & Casualty Insurance Company v. Rodriguez, 1 answers that question clearly and, in my view, correctly.

At its core, this case is not really about replacement cost versus actual cash value. It is about accountability. Universal issued a replacement cost policy. A loss occurred. Universal denied the claim. Only after losing at trial did Universal argue that because the homeowners had not completed repairs, their damages should be capped at actual cash value. That argument asks courts to pretend the denial never happened. The Sixth District refused to play along.

Florida’s replacement cost statute allows insurers, during the normal adjustment of a covered claim, to pay actual cash value first and hold back depreciation until repairs are performed. That statutory framework makes sense when the insurer is honoring the contract. It makes no sense when the insurer has denied coverage altogether. The statute governs claims handling. It does not operate as a damages-limiting escape hatch after a breach of contract has been proven.

This decision recognized what contract law has long taught. Once a breach occurs, the damages inquiry is backward-looking and hypothetical. The question is not what the insurer paid, or even what the insured managed to do after the denial. The question is what the insurer would have owed had it performed as promised. In a replacement cost policy, that answer necessarily includes replacement cost.

Insurers often argue that allowing replacement cost estimates without completed repairs rewrites the policy. The court correctly turned that logic on its head. It is the denial that rewrites the policy, not the remedy. An insurer cannot deny coverage, deprive the insured of funds needed to repair, and then use the lack of repairs as a shield against full liability. That would reward the breaching party and punish reliance on the contract.

This decision aligns the Sixth District with the Second and Third District Courts of Appeal and deepens the conflict with the Fourth District’s decision in Qureshi. 2 That conflict is not academic. It affects real homeowners who cannot front tens or hundreds of thousands of dollars to rebuild while fighting their insurer in court. It affects public adjusters whose damage estimates are often the only evidence available after a denial.

There is also a broader lesson here about incentives. If denial capped damages at actual cash value, insurers would have every reason to deny first and litigate later. By holding that replacement cost damages remain available after a wrongful denial, Florida courts are reinforcing the idea that denial is a serious act with serious consequences.

Florida’s insurance market is strained, but the answer to market stress cannot be rewriting promises after the fact. Replacement cost coverage means something. This decision helps ensure that it still does.

Thought For The Day 

“Florida is a place where the soul is fed by sunshine.” 
— Jimmy Buffett

1 Universal Prop. & Cas. Ins. Co. v. Rodriguez, No. 6D2024-1194 (Fla. 6th DCA Feb. 2026).

2 Universal Prop. & Cas. Ins. Co. v. Qureshi, 396 So.3d 564 (Fla. 4th DCA 2024).