On January 21, 2021, the Florida Supreme Court unanimously affirmed the long-standing principle in Florida that extra-contractual and consequential damages are not available to an insured who has not brought a "bad faith" action against their insurer. Instead, when an insured has only alleged that an insured has breached the terms of the policy, the insured is only entitled to recover the "amount owed pursuant to the express terms and conditions of the policy." As a consequence of its decision, the Supreme Court rejected the lower appellate court's finding that an insured could seek "consequential damages" for its lost rents even when the policy did not provide coverage for lost rental income so long as such those damages were "contemplated" or foreseen at the time the policy was issued.

The Supreme Court found disfavor with this reasoning from the lower court, explicitly stating that the parties "must rely on what they actually have pursuant to the express terms" of the insurance policy. This decision is important because the Court took time to clarify one of the central tenants of first-party insurance law in the State of Florida, namely that an insured in a breach of contract action is limited in seeking only those damages that are set forth in the policy. An insured can still seek extra-contractual or consequential damages in a later, separate "bad faith" action against the insurer, however it is now certain they cannot do so when they have only sued their insurer for breach of the insurance policy. While of course further challenges and attempts to distinguish this opinion are possible, this decision should serve to quell the groundswell of insureds seeking damages outside of the policy where those insureds have not sued their insurer pursuant to Florida's "bad faith" statutory framework.

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