Think twice before buying out of State insurance for your home in Florida. Out of State insurance companies may have advantages that companies incorporated in Florida don’t. Out of State insurance may be able to decide whether they want to litigate in Federal or State Court. This will probably not be disclosed by your insurance agent or anybody else. Take note that many insurance companies are incorporated and have their headquarters in Delaware. As a Miami homeowners insurance attorney I have encountered this dilemma.
There is a simple reason why an out of State insurance company may be able to either litigate in State or Federal Court. According to Federal Rules of Civil Procedure;
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between–
(1) citizens of different States;
In other words, if your claim exceeds $75,000 and your insurance company is incorporated out of State than it will most likely be able to remove your case to Federal Court. If there is hurricane or substantial loss then the amount of a claim can easily exceed $75,000.
So you may ask yourself why is litigating in Federal Court any different than litigating in State Court. The short answer is that Federal Courts are defense inclined. This means that there is more pressure on the Plaintiff (the person initiating the suit) than on the insurance company defending it. Thus, you and your attorney will have to extend more efforts to pursue the very same claim.
Before buying an out of State insurance company consider the points made above and consult with an insurance agent and an attorney. Also, consider the value of your property and its contents. The higher the value of your property and contents the more likely it is that you will be pulled into Federal Court.
A South Florida property insurance attorney is here to assist you 24/7. Should you have any questions please call us at 1.888.423.8353 or 305.764.9907.