What qualifies as “sinkhole damage”?

Question: My home has confirmed sinkhole activity. However, my insurance company denied my claim because they said the damage was not “severe enough.” They indicated to me that unless there is damage that constitutes “structural damage,” it is not covered by my policy. Is this correct?

Coverage for structure and the land

No, it is not. Under Florida law, an insurance company must provide coverage to repair the “structure and the land.” The definition of what constitutes “structural damage” is not defined in the statute. As such, its definition is subject to interpretation by courts, who must determine when structural damage has been met.

The dispute is pretty simple to parse out between the parties. The insurance companies want to take a very narrow interpretation of the word “structure” to mean that it must meet an engineering definition. That definition, from an engineering standpoint, would mean that the sinkhole activity caused a loss of support to the load-bearing walls.

This definition, however, flies in the face of the actual context of the law, which simply states that the insurance company must pay for repairs to stabilize the structure and the land. It does not say, as suggested, that the damage is only covered if it is structural.

Courts denying insurance company arguments

At least one judge in Central Florida looked at this and threw out the insurance company’s arguments. We are working through several of these right now, and I think these arguments will go away once enough courts hear about it.

My bigger concern is that there is also discussion between many insurers that the definition in the law and in their policies should be limited to covering only structural damage. In that case, you could have a home with a large, open sinkhole in the yard, but they disclaim the coverage because of this.

Copyright © 2017 Sinkhole Damage Blog LLC. | Website by S3 Media.