Can I Sell My House With an Open Insurance Claim in Florida? (Hurricane Michael + Contractor Nightmare)

If you’re in Florida and dealing with storm damage, you might feel trapped in a frustrating loop:

• The insurance claim drags on…
• Contractors come and go…
• Repairs stall…
• And the house becomes a constant source of stress.

So the question becomes:

Can I sell my house with an open insurance claim in Florida?

In many cases, yes but you need to handle it carefully so you don’t accidentally create problems with your claim rights, your disclosures, or your closing.

I’m Peyton with Panhandle Real Estate Investments. We bought a cash, as-is single-family home in Panama City (Callaway) off Plantation Drive that had Hurricane Michael damage and a seller who spent about four years getting the insurance claim settled—while also dealing with a contractor who got paid and didn’t complete the work.

The seller kept all claim rights after closing—nothing transferred to us. And that’s the core lesson: the sale and the claim can be handled separately, as long as you structure it correctly.

Not legal advice: Insurance claims and property sales can get very fact-specific. If you’re in litigation or have a large claim, talk to your claim attorney (or a Florida real estate attorney) before you sign.

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The real problem: It’s not just the insurance claim, it’s the time and chaos

In this situation, the seller wasn’t only dealing with the claim. He was also dealing with a contractor who was paid for work that never got finished. That combination is brutal:

• The house stays damaged longer
• Repairs become a moving target
• Motivation disappears
• And the claim process gets harder to manage because the property condition keeps changing

Florida agencies and consumer resources consistently warn homeowners (especially after storms) that scams and contractor fraud spike after disasters, which is part of why so many people end up stuck.

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The key concept: Selling the property doesn’t automatically “transfer” the insurance claim

There are generally three buckets people fall into:

1. Sell the home as-is and keep the claim rights (what your seller did)
2. Sell and assign some post-loss benefits (only if allowed and documented properly)
3. Repair first, then sell (often slower and riskier if contractors are unreliable)

Whether claim benefits can be assigned depends heavily on policy terms and Florida law you can’t assume it’s transferable just because the house is sold. Florida statute makes clear that a policy may or may not be assignable based on its terms, and addresses post-loss benefit assignments.

Also, if there’s ongoing litigation, it may continue after the sale depending on how rights are retained and how the case is structured meaning the seller may still need to participate even after closing.

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Option 1 (Most common): Sell as-is, keep the claim rights, and move on

This is usually the cleanest route for homeowners who are emotionally done and just want out.

How it works:

• Buyer purchases the home as-is
• Sale price reflects the condition and repair burden
• Seller keeps rights to the insurance claim tied to the period of ownership/loss event (as applicable)
• Contract and closing documents clearly spell out that no claim rights transfer

This is essentially what happened in your Panama City deal: cash sale, as-is, and the seller retained the claim rights.

Why people choose it:

• stops the stress now
• stops spending money on a damaged home
• avoids additional contractor risk
• avoids waiting months (or years) for the claim to finally resolve

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Option 2: Assign post-loss benefits to the buyer (only if your attorney says it’s appropriate)

This sounds simple in theory (“just give the buyer the claim”), but it’s not always that easy.

Florida’s rules around post-loss assignments have changed over time and can get technical fast. At a minimum, the assignability depends on the policy and the statutory framework.

Translation: if you’re thinking about assigning claim benefits, treat it like a legal document not a handshake and have your attorney review it.

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Option 3: Repair first, then sell (only if you trust your contractor)

This can produce a higher sale price, but it’s also where homeowners get burned especially if:

• contractors are understaffed
• the scope keeps changing
• you’re fronting money while waiting on reimbursement
• you’re not experienced managing a rehab

The FTC’s consumer guidance on home improvement scams flags big warning signs like pressure tactics, demands for large up-front payments, and shady behavior around permits.

If you’ve already had one contractor take money and not finish, “repair first” may simply be doubling down on risk.

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What Florida homeowners must get right: Disclosures

Even when selling as-is, Florida sellers generally have a duty to disclose known facts that materially affect value and aren’t readily observable this comes out of Florida case law (often discussed under Johnson v. Davis).

Practical advice:

• If you know about storm damage, water intrusion, mold concerns, roof issues, structural concerns, or major repairs that were started but not completed disclose it.
• If the property has an open claim or prior claim related to known damage, don’t try to “hide it.”

When sellers attempt to conceal, it doesn’t just create legal exposure it can blow up the transaction late and cost months.

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The “Version 2” checklist: How to sell with an open Hurricane Michael claim AND contractor problems

1) Create a “Claim + Contractor” folder (one place, clean and simple)

Include:

• claim number, carrier name, adjuster info (or attorney contact if in litigation)
• photos (before/after)
• estimates and repair scopes you received
• contractor invoices, proof of payment, texts/emails, and a timeline of what happened

This isn’t just for the buyer. It’s for you so you can clearly show what’s been done and what hasn’t.

2) Get clear guidance from your attorney on one sentence:

“Do I keep claim rights after I sell?”

In your case: Yes, seller kept them and nothing transferred.

That should be explicit in the purchase contract and closing docs don’t assume the title company will “know what you meant.”

3) Decide the clean strategy: keep the claim or assign it

Most homeowners want this:

• “I’m selling as-is, I’m keeping claim rights, I’m done with the house.”

That’s fine. Just document it properly.

4) Put buyer expectations in writing (as-is means as-is)

Make sure the contract clearly reflects:

• property is sold as-is
• buyer is responsible for repairs after closing
• claim rights are retained by seller (if that’s the deal)

5) Protect yourself from contractor mess spilling into closing

If a contractor was paid and didn’t finish, it raises practical questions:

• could the contractor claim money is still owed?
• could there be lien issues?
• are there disputes over work “furnished”?

Florida’s lien waiver statute emphasizes that lien rights generally can’t be waived in advance and waivers apply only to labor/material actually furnished.

This is why clean documentation matters: it helps professionals advise you and helps avoid surprises at closing.

6) Know your escalation options for claim disputes

Florida DFS offers mediation and neutral evaluation programs as a way to resolve certain claim disputes, and they provide consumer assistance resources as well.

(Again—this doesn’t replace your attorney if you’re in litigation, but homeowners should know these resources exist.)

7) If you’re hiring a new contractor at any point, verify licensing

For Florida, DBPR provides tools to verify licenses and guidance on checking contractor credentials.

After storms, disaster-related scams spike, so license verification isn’t “optional.”

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Why this deal actually closed: trust was built, not forced

Here’s the part homeowners relate to:

This seller wasn’t ready for a long time. It took years to work through the insurance side. We didn’t pressure him. We simply kept an open line of communication for over a year, checked in periodically, answered questions, and let him move at his pace.

When he was finally in a position where selling made sense, the relationship was already established and he felt comfortable moving forward.

That’s how these deals should feel.

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If you’re in a similar situation in Panama City or the Florida Panhandle

If you’re dealing with Hurricane Michael damage, an open claim, or a contractor who took money and didn’t finish, you don’t always need to “win the whole fight” before you make a move.

Sometimes the best move is simply selling as-is, keeping your claim rights (when appropriate), and freeing yourself from the daily stress of the property.

Panhandle Real Estate Investments
Call/Text: 850-778-2212