Hegel v. First Liberty Insurance Corp.
Facts
The Hegels' 2010 homeowner's policy covered "sinkhole loss," defined as "structural damage to the building, including the foundation, caused by sinkhole activity," but did not define "structural damage." After discovering cracking and other damage in 2011, the Hegels made a claim that First Liberty denied on the ground that the home had not sustained structural damage covered by the policy. For purposes of obtaining appellate review on contract interpretation, First Liberty stipulated at summary judgment that if "structural damage" meant any damage to the structure, then such damage existed, was caused by sinkhole activity, and the Hegels' damage estimates would be accepted. The district court adopted that broad interpretation and entered judgment for the Hegels.
Issue
Whether the homeowner's policy term "structural damage to the building" means any damage to the structure, or instead means a narrower category of damage. A related question was whether definitions from the Florida Building Code or the 2011 amendment to Florida's sinkhole statute should be incorporated into the policy.
Rule
Under Florida law, insurance policy language is interpreted according to its plain meaning, read in context and in the policy as a whole, with every word given effect. In this context, "structural damage to the building" means damage that impairs the structural integrity of the building, not simply any physical damage to the building, and courts may not rewrite the policy by importing technical definitions not contained in it.
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