Tag Archives: Sinkhole Claims

Insurance Policies and Coverage Issues

Tips on Filing a Sinkhole Claim

Do you have any tips on filing sinkhole claims? Any mistakes I should be sure to avoid?

Once you decide to file a sinkhole insurance claim for sinkhole damage, it is very much you against the insurance company. Most of our clients, regardless of whether they are in Ocala or Spring Hill, tell us that they feel an adverse relationship with their insurance company right out of the gate. Unlike water claims or even small fires, confirmed sinkhole activity can cause considerable damage and require the active participation of your insurance company.

Some carriers, like anything else, take better care of their insureds than others. Regardless, there are important tips to consider in filing sinkhole insurance claims like this:

Consider the Safety of Your Family

If the damage to the home is considerable, notify your insurance company that you wish to be moved to another location while the testing requisite to sinkhole insurance claims is pending. In most cases, this is not usually required. While damage can appear rapidly, like it did recently in Hudson, Florida, most sinkhole damage or sinkhole activity does not cause noticeable damage to the home.

Make Sure That All Communication with Your Insurance Company Is in Writing

When we counsel clients who are awaiting sinkhole insurance claim decisions, we confirm everything in writing. The insurance company is noting everything you say, and will likely be asking to record portions of your personal statement. As such, you should confirm everything they tell you as well.

For example, in a recent sinkhole insurance claim in Ocala, we had an insured who could not get the insurance company to conduct an investigation in a timely manner. The insured told us she had been told the investigation would start within a week. The insurance company, however, told us they had told her it would be at least 6 to 8 weeks. At the time they told her it would be a week, confirming it in writing would have made the investigation occur much faster. A lot of times, we serve this role as we act as the voice of the insured, trying to get the claim resolved as quickly as possible.

Read my considerations you should weigh before filing a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Sinkhole Repairs for Other Structures on Property

Other than the property coverage provided for under my insurance policy, does my insurance policy cover sinkhole repairs for other things, such as my driveway and other parts of my home?

Quite frequently sinkhole damage can occur to areas of an insured property that are separate and apart from the dwelling residence. Depending on your policy, there may be coverage for additional structures on the property. Typically, this would potentially include a guesthouse, driveway or other permanent improvement to the land.

In our experience, insurance companies will sometimes attempt to include the sinkhole repairs to damages for additional insured structures under the coverage for the main dwelling residence. This unfairly deprives the insured of other available coverage, which is separate from the insurance for the dwelling on the insured property.

For instance, an engineer hired by the insurance company confirmed sinkhole activity affecting the property and prepared a  sinkhole repair plan calling for grout to be injected under several points under the driveway. This grouting, by necessity, involved the separately insured other structure (the driveway), yet the insurance company failed to apply the other available coverage to this portion of the sinkhole repair. Instead, the insurer unfairly attempted to “lump” this segment of the sinkhole repair under the coverage for the main dwelling.

We provide analysis and answers to our insured clients about this and many other types of insurance policy questions.

Read our tips on filling out a sinkhole claim.

Have a burning question you”‘d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Your Duties in a Sinkhole Claim Investigation

After I filed my sinkhole claim, the company contacted me and asked that I participate in an “examination under oath”? What is this, and am I required to do so?

Nearly every insurance policy has contractual language that requires the insured homeowner to cooperate during the investigation of a sinkhole claim by the insurance company. At times, an insurance company may request their insured to submit documentation and to provide a statement under oath concerning the facts of the claim.

Although this type of request during the initial investigation of a sinkhole claim is uncommon, when such a request is made, you must cooperate with the insurance company. This duty to cooperate includes providing sworn statements (an examination under oath) as well as responses to reasonable requests for documents.

Sometimes this type of investigation is premised on the theory that there was a prior sinkhole claim or that there is factual information necessary that the insurance company does not have in their possession. Regardless of why the insurance company makes these requests to substantiate your sinkhole claim, you ordinarily need to fully cooperate to the best of your ability. We have appeared at countless examinations under oath, and we know what to expect. Please contact us to discuss your legal options and to how to best protect your rights under the insurance contract and Florida law.

Read our tips on filling out a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Sinkholes and Application Defenses

Recent Question: My insurance company hired an engineering firm, who found sinkhole activity at my home. Immediately after we received the report, we were instructed to appear at a law firm to bring documents including tax returns, the closing documents at the time of sale, and a bunch of other things. Can they do this? Continue reading Sinkholes and Application Defenses →

Sinkhole News for Realtors

Realtor? Meet Sinkholes. Sinkhole? Meet Realtors.

We are very pleased with the enormous response we had recently to our efforts to reach out to realtors, real estate brokers, and others in the real estate field regarding our resources at Sinkholedamageblog.com. In the past week, we have been flooded with inquiries regarding the various issues realtors have to resolve in handling homes associated in any way with sinkhole activity. The legal issues between realtors, their buyers, and other sellers are very important and can create problems for all involved.

Currently, we are working on preparing a continuing education program for realtors, to assist them with these issues. We also intend on providing basic, fundamental training for realtors on sinkhole issues because real estate professionals often serve as a conduit for information. Our initial reaction to this idea has been overwhelming, as more than 2,500 realtors throughout Florida have made inquiries into sinkholedamageblog.com, in the past week. This tells us we are definitely onto something, and we intend on filling the need immediately.

If you are a realtor or are involved in the real estate profession in any way, we want to hear from you. We want to know what questions you are getting from your clients, your brokers, or if there is simply information you think we can provide to assist you in your work. We can provide you direct responses via email, and can also address the concerns you have in upcoming blog posts. We also want to hear about the areas in the State of Florida where these issues are coming up the most. We can provide you a Florida sinkhole map, which will likely provide you some sense of why this comes up in certain areas more than others, and we can provide you tips on how to handle sinkhole claims if your clients have these issues.

We look forward to hearing from you.

Insurance Policies and Coverage Issues

The Effect of Past Sinkhole Claims on a Current Sinkhole Claim

Question: After I discovered damage to my home that I thought might be sinkhole related, I found out my house had confirmed sinkhole activity before I bought it. Does this impact my sinkhole claim?

What to know about past sinkholes on your new home

If a property previously experienced sinkhole activity or was involved in a sinkhole claim, the insurance company will attempt to defend the new claim by alleging the damage is all pre-existing or was related to the past claim. A seller of property in Florida who made a prior sinkhole claim or received any settlement proceeds for a sinkhole claim will need to fully disclose the relevant details of the claim to the purchaser of such property. This would include:

  • A description of the magnitude of the sinkhole damages
  • The extent of any repairs completed at the property
  • The amount of the sinkhole claim settlement proceeds that were utilized for any repairs

An insurance company will want to know the information concerning the past sinkhole claim and if the dwelling demonstrates new evidence of continued progression of damage due to the past failed repair attempt. Having the details of any past sinkhole claim is critical to pursuing any renewed or new claim by the insured homeowner.

As long as the insured honestly puts forth all noteworthy facts to his/her home insurance company and discloses all material information about the history of the home, there should be little reason for an insurance company to not perform a fair investigation into the sinkhole claim.

Because of our experience working for the insurance carriers, we are familiar with certain tactics frequently employed by the insurance companies in fighting sinkhole claims, and we know what to expect.

Please contact us to discuss your legal options and to how to best protect your rights under the insurance contract and Florida law.

Insurance Policies and Coverage Issues

Florida Sinkhole Statutes Regulate Investigations

How sinkhole coverage is investigated

Question: If I file a claim for sinkhole coverage, what kind of investigation does the insurance company have to perform?

The Florida sinkhole statutes relating to investigations for sinkholes are very precise. These statutes require certain particularities concerning the professionals who must perform the subsidence investigations, as well as the methods and standards involved in the tests to determine the presence or absence of sinkhole activity.

What insurance will do

Some insurance carriers believe they can merely “look” at your property to make this determination or they hire an outside company to “look” at your property to determine the presence or absence of sinkhole activity, without conducting the costly testing required by Florida’s sinkhole statutes.

However, a “forensic structural investigation” is an untrustworthy, less expensive alternative relied upon by some insurance carriers, and there is typically no geotechnical data to support any competent opinion concerning the subsurface conditions at the insured property.

What you need

We are thoroughly familiar with the proper testing methods, which are vital to determine if damage to a structure is related to sinkhole or settlement activity, and we are able to address the shortfalls and deficiencies in most investigation reports.

That being said, if your insurance company has come up with an analysis of your property that is raising red flags, do not hesitate to contact a lawyer to ensure you are getting the attention you are entitled to from your insurance company.

Insurance Policies and Coverage Issues

Sinkhole Insurance Claim Delays

Question: The experts say there’s sinkhole activity on my property but does it necessarily mean the insurance company will cover the damage?

We have recently received a fair amount of inquiries from homeowners who have reported a sinkhole claim, have had the property tested, have been told by the engineering firm that sinkhole activity is present at their property, but they are still waiting for their insurance company to decide if they will be covering the loss.

How to know what insurance will cover

It is often difficult for people to understand why a report discovering sinkhole activity does not automatically qualify them for the sinkhole insurance benefits in their policy. As we have discussed previously, there are many reasons why an insurance company can deny sinkhole coverage such as misrepresentations on applications or prior damages.

If you have had your home tested and instead of issuing payments, your insurance company demands you provide a truckload of documents such as home inspection reports, mortgage information, seller disclosure forms or photographs, be cautious. This most likely means your sinkhole insurance carrier is looking for alternative ways to deny your claim and get out of paying you benefits.

When to be skeptical if your insurance carrier

This is a slippery slope and sometimes a homeowner’s honesty and willingness to cooperate can be used against them. Of course, you do have a duty to cooperate and the insurance company is usually entitled to this information if you have it.

It may be smart to keep in perspective what the insurance company plans to do with this information. If you’re ever unsure about what the information you’re being asked for has to do with your claim, contact an attorney. While you will not be paid unless you cooperate fully, you are not obligated to answer every question, and having an attorney on your side can help keep your claim on track.

Read our tips on filling out a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Material Misrepresentation in Insurance

What is material misrepresentation in insurance?

When filing an insurance claim, it might be a shock to be informed that your insurance company is attempting to assert a material misrepresentation defense against you, instead of interviewing you about your claim. So what is material misrepresentation in insurance? Should you be concerned?

When your claim can be canceled

In the state of Florida, an insurance company may rescind (or cancel as though it never existed) your insurance policy if they determine you have mispresented the underlying facts of your home and its history. If your insurance company believes that you withheld facts from them that would either cause them to deny your policy or charge you a higher premium, they can state they are not obligated to cover your claim or even your policy.

While this is a scary thought, keep in mind that while they may feel this is within the realm of possibilities, they must prove that you purposefully lied to them, and this is very difficult. This is because they must prove that you specifically told them something in your description of your home that was untrue.

What qualifies as lying?

This is where you’re likely in luck. As aforementioned, they must prove that you reported something that was untrue. Therefore, if your home had prior sinkhole damage but you didn’t know, you cannot be held liable for this information.

Second, you cannot be held liable for information that the insurance company did not ask for. If, for example, you were aware of a sinkhole that had opened next door to the house, but the insurance company never asked if there was a sinkhole next door, you cannot be held responsible for the insurance company’s negligence. It was their duty to get a well-rounded picture of your home, not yours!

Third, only information that has been confirmed and stated can be used against you. For example, if someone advised that “you better have that checked out” in reference to a crack in the foundation, it does not state that there are any issues with the foundation, nor any history of issues. There is no reason to expect a layperson to understand what a crack in the foundation might mean so it cannot be assumed that you withheld information.

Your home’s background is the insurance company’s responsibility

The basic idea is that material misrepresentation in insurance cannot be claimed about information that your insurance company did not directly ask you for. As long as you answered all the questions that were presented to you to the best of your ability, you have no reason to be concerned about your claim or policy being canceled.

While insurance applications tend to be ambiguous and poorly written, it must be proved that you outright lied in order to confirm material misrepresentation, and this is very difficult to do.

Once they press you for whether or not you told them any particular facts about the home, questions like the following arise:

  • Did they inspect the home?
  • Was the appearance of the damage normal for homes of its age?
  • Did you buy the home for a reasonable value?

If you bought the house at its actual market value and later it is determined the damage was sinkhole related, who would believe you would do this intentionally?

Insurance Policies and Coverage Issues, Sinkholes in the News

Florida Sinkhole Claims on the Rise

An interesting article posted on TBO.com indicates what most of us know: that sinkhole claims are on the rise. The legislature seems to have caught on to this (probably through insurance lobbyists) and wants to evaluate where and why these claims are on the rise. We do see a common theme in this article which is that sinkhole alley  resides in Hernando, Pasco and Citrus Counties and surprise that claims in other areas of the state are becoming more common.

As we have discussed many times before, areas such as Ocala, Gainesville, The Villages, Hillsborough and Pinellas Counties are equally at risk, just not as highly publicized. It is also interesting how the article discusses the difficulty they expect to have in mapping sinkhole locations due to poor and spotty records keeping systems over the years.

Finally, you see several hints from certain interviewees that fraudulent sinkhole claims are on the rise. We wonder, if you have damage that looks like it could be related to sinkhole activity such as cracks or depressions in the yard, how can you be blamed for filing a claim and getting some piece of mind? This is especially true considering the trend for carriers today, is to drop or carve out sinkhole coverage for Florida homeowners.

Read our tips on filling out a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.