I used to be taught that insurance coverage protection might by no means be created by estoppel, however insurers waive exclusions and situations precedent by fee. So, when an insurance coverage firm pays a declare after which later modifications its thoughts, can it sue its policyholder to get that cash again?
That query got here squarely earlier than a Florida federal court docket in Scott A. Saveraid Belief v. QBE Specialty Insurance coverage Firm. 1 The dispute started, as so many have lately, with Hurricane Ian. The policyholder, the Saveraid Belief, owned a beachfront property and carried surplus strains protection by way of QBE. After the storm, QBE paid over $300,000 for dwelling harm and one other $20,600 for lack of use. Months later, and after the policyholder filed a lawsuit to acquire extra advantages, the insurer claimed it had made a mistake. It claimed that the harm was truly excluded flood or storm surge harm. QBE filed a counterclaim in search of to recuperate the funds by way of a concept of unjust enrichment.
The policyholder moved to dismiss, arguing that Florida regulation merely doesn’t permit an insurer to remodel a contract declare into an equitable refund case. The Belief identified that QBE’s personal pleadings admitted that the funds have been made underneath the insurance coverage coverage, following an investigation and protection willpower. That, the Belief mentioned, made this a contractual dispute, not a case of unjust enrichment.
Florida regulation has lengthy held that fairness can’t be invoked when an specific contract governs the subject material. The policyholder additionally relied on a latest Eleventh Circuit case, MONY Life Insurance coverage Firm v. Perez, the place the court docket rejected an insurer’s try to make use of unjust enrichment to claw again advantages, even when the coverage lacked a reimbursement clause. The Belief’s message was easy: if QBE wished a contractual proper to recoup funds, it ought to have written one into its coverage.
QBE countered that this was not a typical protection dispute. It had paid for a loss it now believed was clearly excluded. The insurer argued that the coverage didn’t tackle the right way to deal with mistaken overpayments, leaving restitution in fairness as its solely avenue for reduction. It relied on choices like Pinewood Condominium Flats v. Scottsdale Insurance coverage Firm, through which a court docket allowed an unjust enrichment declare for overpayments made exterior the scope of a coverage. QBE warned that denying its declare would create an unfair windfall for the insured, who would hold cash it by no means had a proper to obtain.
The decide wasn’t persuaded. The court docket dismissed QBE’s unjust enrichment declare with prejudice, that means it can’t be refiled. The decide acknowledged that some prior circumstances had permitted insurers to hunt restitution of overpayments, however she held that the Eleventh Circuit’s latest MONY Life choice foreclosed QBE’s concept. The court docket emphasised that even when a coverage is silent on compensation or overpayment, these points nonetheless fall throughout the “similar material” because the insurance coverage contract. QBE’s funds have been made as a part of its contractual obligations, and calling them a mistake didn’t remodel them into an equitable declare. The court docket additionally famous that QBE might have included a clawback clause in its coverage, however selected to not, and that fairness wouldn’t step in to rewrite the cut price.
This ruling sends an essential sign to insurers tempted to stroll again protection choices after the very fact. This state of affairs typically arises when insurance coverage protection attorneys cleverly search for methods to lift the stakes for the policyholder. They typically allege some kind of fraud as effectively.
Nevertheless, as soon as an insurer makes a protection willpower after which fee underneath its coverage, it can not merely sue its policyholder in fairness to undo that call. If it needs the power to recoup funds it later deems extreme or mistaken, it should place that proper within the coverage. For policyholders, the choice reinforces a precept as previous because the insurance coverage promise itself: when an insurer makes a deliberate protection willpower and points fee, it should stand by its phrase until fraud or some contractual foundation exists to do in any other case.
Thought For The Day
“Fairness won’t relieve a celebration from the results of its personal deliberate selection.”
– Justice Benjamin Cardozo
1 Scott A. Saveraid Belief v. QBE Specialty Ins. Co., No. 2:25-CV-394 (M.D. Fla. Nov. 7, 2025) (See additionally, QBE’s Counterclaims; Saveraid Belief’s Movement to Dismiss Counterclaim; and QBE’s Response to Movement to Dismiss Counterclaims).