We had a prior sinkhole investigation performed for a sinkhole claim, and the expert determined that there were only cosmetic cracks present on the house and there was no way to determine whether they were related to the sinkhole. The engineering firm recommended grouting and this was done. Now three years later, we are trying to sell the house. The buyer has been informed that because we filed a sinkhole claim, our property is now “blackballed” by all the Florida homeowner’s insurance companies, so the sale fell through. What have others done in this circumstance and what are our options?
First, on the loss issue, it is not scientifically possible to distinguish between damage that is “sinkhole” versus damage that is the result of other, shallow soil problems. No engineer in Florida would testify to that. Within the context of a subsidence investigation, the engineer should determine (1) the presence of sinkhole activity at the site (or nearby), and (2) whether the home has subsidence damage at all (regardless of what caused it). If, as in this sinkhole claim, the engineer was unable to determine one way of the other, the “tie goes to the runner (the insured).” An insurance company cannot deny a sinkhole claim based upon an opinion that “we can’t decide” whether it’s sinkhole activity.
Second, on the blackball issue, all parties who file Florida insurance claims are put in a database, accessible by all insurance companies. To that end, it is not good to have a subsidence claim, especially when the determination was “yes sinkhole,” but no payment. Without the payment and a subsequent repair, it may be very difficult to obtain Florida homeowner’s insurance coverage. In fact, there are even reports of Citizens not agreeing to cover homes in this context. The law was recently changed so that carriers are no longer required to provide sinkhole insurance coverage. This opens the door for carriers to agree to provide coverage on a home with a specific exclusion for sinkhole related damages, especially if the home has been grouted. In your case, you should certainly ensure that the buyer has all the appropriate documentation demonstrating that the home has been grouted and certified by an engineer. It may take some added effort by both the buyer and seller though.
Read more about the troubling trend of carriers cancelling or non-renewing homeowners in the middle of their sinkhole claim.