Tag Archives: Continued Sinkhole Activity

Insurance Policies and Coverage Issues, Repairing Sinkholes

Tips Dealing with Insurance Companies on Sinkhole Repairs

My insurance company is currently working with a local contractor to repair confirmed sinkhole activity at my house.  During the process, the damages appear to be getting worse, and I am hearing the contractor raise concerns that the repair may not be taking as they had expected.  Any suggestions?

Repairing sinkhole activity, speaking as a sinkhole lawyer, can be complicated, and most certainly is frustrating.

The process takes a long time, often causes even more damage, and there is no guarantee that the sinkhole repair will work.  Most of the time, property owners feel as though they are alone in the process, as the insurance company acts more like a bank than providing good sinkhole insurance for repairs.

First suggestion:  Document the entire process, either by photos or by video. As the process begins, and progresses, you should monitor the process either with a still camera or a video.  I have found that the most common question relates to whether the subsurface repairs are actually causing the damages to worsen, which does occur.  By recording the repairs, you will be able to get a sense of “before and after.”

Second suggestion:  Always raise your concerns with the insurance company in writing, both to your claims adjuster and your insurance agent. Many times, insurance claim representatives have a difficult time separating what is a “problem” versus what is just common frustrations of an insured.  If you submit your concerns in writing, and tell them exactly what you want them to do, it makes it clear you have defined your expectations.  That way, you will both know if the issue has been resolved.

Third suggestion:  Consider hiring your own contractor or consultant to monitor the success of the project. The reason is that the insurance company will almost always have someone there to monitor the project to assure it is being done according to the plans set up by the engineer.  Even if it does cost you some money out of pocket, you will have a better feel if you know an independent party is present to assure the work is being done correctly.

In the end, document the entire process, put your concerns in writing, and hiring a third party consultant will serve you well.  Best of luck to you.

Read our tips on filing a sinkhole claim.

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Insurance Policies and Coverage Issues

Sinkhole Damage and Structural Issues

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.