Well, Senator Fasano was nearly a champion for Florida homeowners but at the last minute and literally by just one vote, Bill 408 has passed through the legislature and will now head to Rick Scott who will either veto or place the new law into effect. We have no reason to believe that Rick Scott will veto this bill. The bill is similar to the one that Charlie Christ vetoed last year but Rick Scott is not similar to Charlie Christ, unfortunately. The one, and really only, positive of the Bill is that insurance carriers in Florida will still be required to offer sinkhole coverage to homeowners. The prior versions of the Bill, particularly the Senate version, made it the option of the insurance carriers whether they offered sinkhole coverage any more. We all knew that would be the demise of sinkhole insurance here in Florida so at least there is some silver lining.
Now on to the negatives for homeowners. We all knew and have been discussing for some time that the legislature would be adding a definition of “structural damage” to the Florida Statutes. In summary, insurance carriers have argued that they should not have to pay out the big bucks to repair homes that have just minimal damage such as hairline cracks or cracks in driveways. This new definition will make it incredibly more difficult for homeowners with sinkhole claims to receive benefits. The new definition provides essentially five standards for what will constitute structural damage. All five are convoluted, archaic and frankly non-sensical. Even the engineers are scratching their heads at what exactly they are looking for. We can tell you the public that we have already heard that insurance companies are expected to deny somewhere near 95% of all claims based upon this structural damage assessment. Thus means from this day forward, if any homeowner files a sinkhole claim, you will have less than a 5% chance of your insurance company paying you any benefits to repair your home. Makes you wonder what you are paying those extra premiums for to get sinkhole coverage? Well thats exactly what the carriers wanted. Their first goal was to do away with sinkhole insurance altogether. Their second goal was to make it so hard to get benefits that homeowners would either stop filing claims or stop paying for the insurance. Don’t let them win.
Now, insurance companies will tell homeowners that it is not all that bad as Bill 408 allows homeowners the right to request that the sinkhole investigation take place even after they deny your claim based upon the level of damage you have. There are two huge catches here. 1) Even if the insurance company tests your home and finds sinkhole activity, they have already denied the claim based on the fact you don’t have enough damage so it doesn’t even matter whether a sinkhole exists or not, they won’t pay you either way. 2) The real kicker, now homeowners who request to have the testing done will have to pay $2,500 out of their own pocket to have the test done.
Let’s recap. Bill 408 states that if you file a claim, the insurance company will do a simple structural evaluation and you have a 95% chance of your claim being denied. You can request that the sinkhole investigation be performed but, you have to pay $2,500 out of pocket to have it done and even if they find sinkhole activity, they will still deny your claim. Is there anyone that does not believe this is the most anti-consumer, insurance funded law that has ever come into effect here in Florida?
The ironic part of all this is that the main focus of Bill 408 was to lessen the amount of litigation and attorney fees. Hmmm. Your new Bill has created a constitutional issue that will be litigated for the next two years, will deny 95% of all claims and literally dares homeowners to hire an attorney to protect their rights. Seems to me Bill 408 just created an absolute perfect storm of litigation for many years to come. With all this being said, we would encourage homeowners to not be discouraged. Many public adjusters and attorneys may be scared away by Bill 408 but we are excited and eager to get going under the new regime and homeowners likewise should not roll over on the insurance benefits you paid for and deserve, or they will win.
As the next week passes, we will be addressing many of the other drastic changes in Bill 408 so stay tuned and please write in with questions about the new Bill.