Q: It’s June 26 and our current Citizen’s Property Sinkhole coverage is in effect until Sept. 25 2011 which was written under old statutes. We noticed cracks around Thanksgiving 2010 but should have filed a claim then but didn’t. Anyways, we are going to file a claim now before policy runs out. Will we be under old rules?? How will new rule effect us or will it?? Confused!!!

A: There is a ton of debate circulating now as to whether Bill 408 can be retroactively applied. I believe this, some carriers will apply 408 retroactively but whether they can is another question. The issue has not yet directly come in front of any Florida judge but has indirectly been discussed and to this point, we believe all signals being sent from local judges is that they are not in favor to applying the Statute to existing claims. Some portions of the Bill, the section dealing with neutral evaluations for example, are being applied to existing claims. This is perhaps more related to the fact that the neutral evaluation process is run by the State of Florida and not the courts. (Stay tuned for a very interesting post on this issue in the next several days).

The best news for you is that you have Citizens and you are governed primarily by the Citizens policy of insurance and not the statutes. Most insurance companies in Florida do not state that they only cover structural damage. The insurance policy over rides the statutes so, if the policy says you do not have to prove structural damage, the statute is useless. Take a look at your specific policy and read the portion pertaining to sinkholes and see how your insurance company defines what a “sinkhole loss” is. It is an important that all insureds are aware of what their policies say they will cover because they are not all the same.