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Ocala Homeowners Could Be Gambling with Sinkhole Coverage

Double-check your sinkhole insurance coverage

Attorney Morgan Barfield of the Barfield Law Group recently provided an in-depth interview to a local Ocala newspaper, the Star Banner.  You can read the full article in the insert below.

The article focused primarily on the changes in sinkhole laws the past several years and how sinkhole insurance coverage is no longer mandatory but now is an optional coverage. The article encourages homeowners to not take the less expensive road and run the risk of homeownership in Florida (especially Ocala) without sinkhole coverage.

“This is a good warning to not only Ocala residents but all homeowners in Florida who live in a high risk area for sinkhole damage”, stated attorney Morgan Barfield in a follow up interview.

Many Ocala residents are still surprised to hear about the large scale sinkhole activity in their area and are not aware that the laws have changed or their own policies have been modified to comply with the new laws.

Barfield Law Group encourages each homeowner to review their current sinkhole policy and make sure it is up to date with the coverage best to protect their home investment.

Be informed of what catastrophic coverage is

As we have written many times, it is of crucial importance that homeowners be up-to-date on the quality of their sinkhole coverage, lest their policy be reduced only to catastrophic coverage without their consent.

When this occurs, one’s insurance policy is only required to foot the bill if they judge your home as unhabitable; if this is not the case, you are left on your own to deal with the effects of your sinkhole, when it comes to both your safety of your family and the property value of your home.

Renew Your Sinkhole Insurance Coverage

Don’t forget to renew your sinkhole insurance coverage

Pursuant to a new law effective January 1, 2010, homeowners in Hernando and Pinellas Counties will automatically lose their sinkhole coverage.

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.

The change you want to prevent

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.

Seriously – condemned.  It is a requirement under the coverage that a government entity must declare it unfit for human habitation.

This shift has already affected sinkhole claims

Since the new coverage took effect, we have already heard from multiple homeowners caught in this switch.  We even had clients who filed claims and subsequently learned they had sinkhole activity at their homes.

Prior to the insurance company paying to repair the home, the insurance company discovered they were not even aware of the change of coverage and denied the claim.

Imagine, learning first that you have a sinkhole claim (because the insurance company found it), and then that they won’t pay for it.  Nightmare.  Now, you can kiss the value of your house goodbye, unless you want to pay for the repairs yourself.

Be in the know

We cannot emphasize this enough.  If your insurance agent tells you that you do not need sinkhole coverage, fire them and get a new agent.  It is simply too risky in this state, just as it would be too risky to be without earthquake insurance in California.