Zurich Paid Under the Small Deductible Three Times. Georgia Would Not Let It Take the Big One Back.

Zurich's claim-file system asked its own adjuster a yes-or-no question about the February 5, 2020 rain event: was it "caused by a flood?" He marked No.¹ That entry, plus three checks mailed four months later, cost Zurich a $2.5 million deductible on each of three events.¹

The Eleventh Circuit published Zurich American Insurance Co. v. First Solar Electric LLC on October 22, and Judge Kidd opened it with a line adjusters will repeat for years: "Golfers get mulligans. But in this case, the insurance company does not."¹ First Solar was building a 1,038-acre solar plant in Georgia under a master builders risk policy when five heavy rain events hit the site between December 2019 and April 2020. Water damage carried a $100,000 deductible per event. Flood carried $2.5 million.¹

Zurich adjusted all five as water damage, then re-characterized them as flood, concluded no single event cleared $2.5 million, and closed the claim owing nothing.¹ The court held the flood deductible did apply as a matter of policy language. First Solar still kept its judgment on three of the five events, because Zurich gave the right away before it ever asserted it.

What was already in the file when the checks went out

The waiver evidence was almost entirely Zurich's own paper. Adjuster Scott Klaben inspected the site in February 2020 and recorded the losses as water damage the next day. He marked "No" on the system's flood prompt. He emailed his claims manager that the first three events each "carrie[d] a $100K deductible." First Solar's broker testified to several conversations in which Klaben said the claims would be treated as water damage. In June 2020 Klaben approved three $200,000 advance payments, noting the $100,000 deductible, and Zurich reserved nothing.¹

What Zurich did not put in the record did the rest of the work. Klaben was never deposed, and Zurich offered no evidence of what prompted the change in position, resting instead on a pure legal argument that Georgia does not permit waiver of a deductible.¹ Georgia does permit it. A deductible is a payment limitation imposed for the insurer's benefit, which puts it squarely inside the category of conditions an insurer can relinquish.² Waiver can be implied from "decisive, unequivocal conduct reasonably inferring the intent to waive."³

Zurich's August 4, 2020 status report was the first time it told First Solar the flood deductible would apply. By then the right was gone: a letter is "wholly ineffective to prevent a waiver that has already occurred," and the court fixed the waiver date at June 11, 2020, the day the checks issued.¹

Why two of the five events are still open

Zurich made the same water-damage call on all five events. It only mailed money on three.

Source: Zurich American Ins. Co. v. First Solar Electric LLC, No. 25-10606 (11th Cir. Oct. 22, 2026), slip op. at 4-5, 17-20, 27.

Rain event	Advance payment	Reservation before payment	On appeal
Dec. 13, 2019	$200,000 (June 11, 2020)	None	Waiver as a matter of law; affirmed
Feb. 5, 2020	$200,000 (June 11, 2020)	None	Waiver as a matter of law; affirmed
Feb. 13, 2020	$200,000 (June 11, 2020)	None	Waiver as a matter of law; affirmed
Mar. 3, 2020	None	Aug. 4, 2020 status report	Vacated; waiver goes to a jury
Apr. 18, 2020	None	Aug. 4, 2020 status report	Vacated; waiver goes to a jury

For the March 3 and April 18 events, no advance payment preceded the status report, and the conduct the court relied on all pertained to the three paid events. So waiver there is a jury question rather than a judgment, and the Eleventh Circuit vacated those portions and remanded.¹ The coverage determination was never the thing that bound Zurich. The unconditional payment was.

That changes what to pull on a multi-event file, and the order to pull it in. Every advance and undisputed payment, with whatever accompanied it. The claim-file entries and internal correspondence that fixed the deductible before the money moved, which sit on the carrier's side and arrive through a request, not through your own tidy file. The date of the carrier's first written reservation, set against the date of its first payment. Where the second date comes first, the gap is the argument, and it runs event by event rather than claim-wide. A client with four paid events and one unpaid one has four strong positions and a fifth worth arguing.

This was a commercial master builders risk policy, not an HO-3, and the court reached waiver through Georgia common law on two questions of first impression, predicting how the Georgia Supreme Court would rule.¹ The Eleventh Circuit covers Georgia, Florida and Alabama; other states treat deductible waiver differently, and some do not treat a deductible as waivable at all. What travels is the sequence the holding turned on, which exists in the file of every claim where a carrier relabels a loss and reaches for a larger deductible after paying under a smaller one. A named-storm deductible dispute and an argument over what counts as flood both run on the same question of which characterization the carrier adopted first, and when it put that in writing. As the Idaho Supreme Court showed this month, whether a file gets in front of the factfinder is its own fight, separate from what the file says.

What adjusters are asking about the deductible switch