The issue of structural damage and its application to sinkhole claims here in Florida has been, and will continue to be, the hot topic in this field. It will likely be beaten to death over the next several years but for now it remains a gray area. USAA, along with the now defunct, Homewise Insurance, were the two pack leaders in this argument. USAA has been denying legitimate sinkhole claims for several years now due to the fact that the home does not exhibit “structural damage”. As we all know, there never was a definition of what structural damage means and because of this the question arose of how do you instruct a jury to determine who is right and wrong if there is no guide on what right and wrong is? Well, USAA came up with the bright idea of asking the judges to provide a definition of what structural damage is. So far, the judges are no where near buying into this argument and USAA has been getting chastised by Florida courts over and over for bringing this argument. Yet, USAA still continues to fight, and lose, and refuse to pay their insureds the amounts necessary to repair their home. It is quite amazing to watch actually.

Now that Bill 408 has become law, the carriers that are desperate enough to make this argument believe that the new Bill will be their savior and are trying to apply the Bill, which provides a more precise and technical definition of what structural damage is, to existing claims. No one was surprised to see USAA make this push but Tower Hill has really stepped into the fray now as well.

Here is a great example of the nonsense that Tower Hill is pulling on homeowners. Our firm recently signed a new client who had been insured with Tower Hill for years. Their current policy went into effect in January 2011. That policy never defined what structural damage was or how it can be tested. The homeowners filed a sinkhole claim in April, before the new Bill 408 was even finalized. Tower Hill stalled and didn”t investigate the home until July, after the new Bill went into effect. Tower Hill sent these homeowners a letter advising that their claim was denied because the damage did not meet the definition outlined in Bill 408. In essence, Tower Hill decided half way through the contract that it was going to unilaterally and without notice to the other party to the contract just rewrite the contract language, to Tower Hill”s benefit of course. Where else in the world of the millions of contracts that are entered into every day would someone be allowed to get away with that? Hopefully not here either.

As a side note, we will be updating this blog to call out those carriers who are trying the same approach. Florida Peninsula is on the radar now.