Cole v. Citizens Property Insurance Corp.
A homeowner who quitclaimed her insured dwelling to an LLC in which she held a 25% membership interest, along with the LLC, sued Citizens for vandalism losses; the trial court dismissed with prejudice, holding Cole lost her insurable interest upon transfer and the LLC lacked standing. The Third DCA reversed, holding that under section 627.405 an insurable interest turns on a 'substantial economic interest,' not title, and whether Cole retained such an interest is a fact question that cannot be resolved on a motion to dismiss; the LLC's allegations of ownership and nonpayment sufficed to plead standing.
Key facts
- Homeowner quitclaimed her insured dwelling to an LLC in which she held a 25% membership interest; both the homeowner and LLC sued Citizens Property Insurance Corp. for vandalism losses.
- The trial court dismissed the complaint with prejudice, finding the homeowner lost her insurable interest upon transferring title and the LLC lacked standing to sue.
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Why it matters
Useful authority for policyholder counsel facing a 'no insurable interest' defense after a transfer of title to an entity: a quitclaim to an LLC does not automatically extinguish the transferor's insurable interest, and… — full analysis with a trial
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