Does FIGA only have to pay contractors to do the work and not include the homeowners and also does FIGA not have to pay attorney fees?
Two separate issues here. The first is whether FIGA can only issue payment to contractors and not homeowners. This is debatable. The issue arises because the statute that governs FIGA that says FIGA doesn’t have to pay homeowners did not go into effect until May 2011, the same time as the new sinkhole statutes. Prior to May 2011 the statute did not contain that language. The debate is does that new FIGA statutory language apply to cases that were in effect prior to the new statute. We say no as you can not generally retroactively apply a statute to an existing claim. FIGA says the opposite because FIGA didn’t become involved in the claim until after the new statute was in effect. FIGA argues that what happened prior to its involvement is irrelevant. This issue has not been decided by a court yet but, it will be in the next several months. There may even be an appeal one day.
The second issue is attorney fees. The FIGA statute basically states that FIGA is not responsible for fees unless it affirmatively denied coverage. In other words, FIGA can not be held responsible for mistakes the prior insurance company that went under made but, it can be held liable for its own actions. So if FiGA itself denies your claim after they took over and you win at trial, they do have to pay fees.