Insurer’s Claim File Not Discoverable in Insurance Coverage Dispute

In an insurance coverage dispute, an insurer’s claim file is not discoverable.  Typically, this is protected as work product and/or not relevant to the issues underlying coverage.  And this is true — the claims file is NOT relevant to the determination of coverage or damages.

 An insurer’s claim would be discoverable in a bad faith dispute against an insurer, but before you can institute a bad faith claim, you have to establish coverage, hence the insurance coverage dispute.  

Recently, in Homeowner’s Choice Property and Casualty Ins. Co., Inc. v. Avila, Fla.L.Weekly D885a (Fla. 3d DCA 2018), the Third District Court of Appeal affirmed, relying on a number of cases discussing this very issue, that an insurer’s claim file is not discoverable in an insurance coverage dispute.  This case dealt with a first-party property insurance dispute where the trial court compelled documents in an insurer’s claim file to be produced to the insured.  The Third District, however, granted the insurer’s petition for a writ of certiorari and quashed the trial court’s order finding this documentation was only discoverable in a bad faith action, not an insurance coverage dispute.  It is not there there is a “claims file privilege,” but an insurer’s claim file is not relevant and contains an insurer’s confidential work product not applicable in the underlying coverage dispute.  This is summed up nicely in a concurring opinion in this case:

In addition to work product, claims files usually contain confidential and proprietary claims-handling materials such as adjuster’s notes; reserves placed on the claim; activity logs; underwriting documents; emails and correspondence; documents related to adjusting or denying the claim; business policies; claims handling manuals, policies or guidelines; and more. These claims handling materials, while discoverable in a cause of action alleging the insurer adjusted a claim in bad faith, are not discoverable in a straightforward first-party or third-party claim for damages based upon the policy. As the Supreme Court has explained, these materials “are not relevant to the only issues involved, those of coverage and damages.” Allstate Indem. Co. v. Ruiz, 899 So. 2d 1121, 1129 (Fla. 2005). See Gov’t Employees Ins. Co. v. Rodriguez, 960 So. 2d 794, 796 (Fla. 3d DCA 2007) (holding in such cases claims files are “immaterial”); State Farm Fire & Cas. Co. v. Valido, 662 So. 2d 1012, 1013 (Fla. 3d DCA 1995) (holding “claim files, manuals, guidelines and documents concerning its claim handling procedures [are] irrelevant to [a] first party dispute”) (emphasis added).

Because claims handling materials are not relevant and material in an action by an insured against the insurer for simple damages and breach of contract when a potential bad faith claim is not ripe, and because these materials are confidential and proprietary, an order requiring their production is properly quashed by certiorari. See, e.g., State Farm Mut. Auto. Ins. Co. v. Premier Diagnostic Ctrs., LLC, 185 So. 3d 575, 576 (Fla. 3d DCA 2016); Castle Key Ins. Co. v. Benitez, 124 So. 3d 379, 380 (Fla. 3d DCA 2013); State Farm Fla. Ins. Co. v. Desai, 106 So. 3d 5, 6 (Fla. 3d DCA 2013).

Homeowner’s Choice Property and Casualty Ins. Co., Inc., supra (Logue, J., concurring).

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.

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