If you have cracks in your stucco due to sinkhole settlement, you can get paid for it. You cannot also submit this same damage for payment under the hurricane claim. However, sinkhole repairs are unique, and could be paid for subsurface repairs under a different set of coverage limits. Suffice to say, these claims are complicated, but do happen regularly.
Essentially, the insurance company is taking a position that they want to cancel or â€œrescindâ€ your policy because you failed to provide information that you either knew they wanted, or should have known to disclose. Honestly, in my experience, these defenses are about as thin as they come. Not a defense I would make, when I represented insurance companies. Here are the issues you are dealing with, when an insurance claim asserts what is commonly referred to as an â€œMMRâ€ defense to your claim, which stands for â€œmaterial misrepresentationâ€ on the application.
During this past Florida legislative session, there were efforts to limit the amount of coverage to 25 percent of the coverage available under an insurance policy. This was kicked almost as quickly as it was filed, weâ€™d like to think in part due to our efforts to focus the public on the issue. This was a really bad idea, and everyone knew it, and it was being sponsored by a legislator whoâ€™s district sees few sinkholes.
Although your insurance company may be named in your homeowners policy as an additional insured party, itâ€™s still up to you how you want a sinkhole claim to be spent.
The recent sinkhole activity in the Tampa Bay area serves as a reminder of the importance of homeowners to check their policies for sinkhole coverage.
It is common for insureds to get caught between insurance companies and construction companies in these situations. We frequently see homeowners who battle with the contractors for years (with no success), only to find out the home had actually be built on a sinkhole prone area. While this may seem unfair, it is not. The insurance company can actually sue the construction company in a claim associated with recovering any payments made to you. This is referred to as â€œsubrogation,â€ and is a part of the insurance process.
Hundreds of homeowners faced residual issues with dry wells or activated sinkholes during the freezes of 2008-2010. The district and advisory board seem to want to walk the thin line between harming the local farming industry by taking away their ability to protect their crops and dealing with the resultant dry wells and sinkholes as they have for the past two winters.
If a sinkhole repair cannot be completed within the policy limits, the insurance company must either pay to complete the engineer’s recommended sinkhole repair or pay you the policy limits without a reduction for the repair expenses incurred.
In order to maintain it, the insured must notify the insurance company at the time of renewal. If you are like most insureds, you do not pour over your renewal notices, merely to determine if the insurance is the same as before. While moving from standard sinkhole coverage to catastrophic coverage will save you on premium, it will be a catastrophic loss if your home has a sinkhole. In order for this new coverage to be of any value, it must cause you home to become so badly damaged that it be condemned.
Both of these bills took a great deal away from individual policyholders and diluted protections in place to preserve rights under most insurance policies. For sinkholes and sinkhole claims, the heart of these bills was to make it easier for insurance defense sinkhole attorneys to defeat the claims of individual homeowners, who are having the sinkhole claims denied and delayed by common investigation and claims adjustment tactics.