Tag Archives: Barfield Law Group

Insurance Policies and Coverage Issues

How Much Personal Info Does My Insurance Need?

The insurance company told me that I was required to produce a copy of my personal financial information at the time I filed my sinkhole claim.  Can they do this?

Under most property insurance policies providing coverage for sinkholes, an insurance company is permitted to request copies of financial information relevant to the claim.

For example, if you had a claim where there was a potential dispute regarding whether you had completed repairs to the home, an insurance company could argue that this information would document whether you actually incurred the expense.  Note, this remains abusive, because they should not ask for bank records, but should instead simply ask you to produce the receipts and other materials.

Document. Document. Document.

Whenever an insurance company makes a request that you find invasive, abusive, or frankly just odd, it is important that you document you concerns in writing.

Describe your concerns, and demand that they tell you why the request is being made.  While they have contract rights to inquire and conduct their investigation of the sinkhole claim, they cannot use these rights in an abusive manner.

Assure the insurance company that you intend to comply with all reasonable requests, but that you are uncomfortable with what they are seeking.  By doing so, you can document your continued cooperation of the claim.  This is important because insurance companies can use any “alleged failure” to provide information as a separate defense of their failure to cooperate.  Keep copies of the letters in your own file, so you can produce these if litigation breaks out.

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

Finding Sinkholes, Insurance Policies and Coverage Issues

Insurance Company Sinkhole Testing

How much testing does the insurance company have to do?

We have discussed before how the insurance expert’s opinion is presumed to be correct. Well, this is a similar scenario.

The law simply requires the insurance expert to perform whichever testing is sufficient in their professional opinion. This is again a very subjective definition which is a point of contention in many of these cases. You have to remember that it is the insurance company’s burden to rule out sinkhole activity at the property so, what does constitute sufficient testing necessary to rule sinkhole activity?

This is a harder question to answer because every home is different.

Variables matter

It’s incredibly important to not only have an independent geologist review the opinions brought forth by the insurance company’s engineers, but have your geologist weigh in on the actual testing methods as well. This matters for a few reasons:

1)  Certain homes have accessibility issues that mean the trucks or equipment can not get to certain areas to test. This creates the potential of an inaccurate report which could mean that you do not get the coverage or repairs that you really need.

2)  The depth of the limestone may determine how much or what type of testing is necessary. If your insurance company’s engineer does not consider this, you may not get an accurate report.

3)  How many anomalies they find during GPR testing may determine how many borings they drop.

4)  The size of the home and whether it is multi or single story may impact testing or a property may have other conditions such as clay or organic material that can influence the type of testing.

Don’t be afraid to be involved

Whatever happens, you’re the one who will be living in the home and will be footing the bill. If you have any concern that your insurance company’s engineer isn’t getting the right story, speak up. Contact a lawyer and/or your own engineer for a second opinion.

Finding Sinkholes, Repairing Sinkholes

How Rainfall Can Effect Sinkholes

Are there particular seasons where sinkhole activity is most likely to occur?

Sinkhole activity is less of an event and more of a process.  Because the majority of confirmed sinkholes are found due to the slow, gradual settlement of rock, they are likely to have occurred months, and sometimes years before they are ever reported.

Because the energy behind sinkholes is water, the rise and fall of the water table often causes additional activity.  As the water washes over limestone, it increases the dissolution of the rock and continues to move soil away from the location.  By so doing, the limestone is more likely to sink or move.  During seasonal changes, the action of water then causes more settlement.

During seasonal changes, it is always wise to do an external checkup of your home, to determine it’s overall condition.  Using a video camera, you can note the condition of the home so that you can compare it to any damage that may appear later in the summer.

Water is skinny

Depending on the kind of paint currently found on the outside of your home, you always want to consider whether your home is in need of a new paint job.  If you do see any surface cracks, it is important to learn why they may be there and to seal them.  This way, as the seasonal rains come in Florida, you can rest assured that no water gets behind your stucco.  As one structural engineer once told me, ‘water is very skinny’, and get can into just about any cracks or crevice.

Later in the year, when the rains stop, take another look at the exterior, to make sure you do not have any problems.  That way, if there are any issues, you have made at least some record of them.  Florida weather is hard on buildings, many of which may not have been constructed in a manner able to handle our harsh conditions.  Between sinkholes and hurricanes, it is wise to use the changing seasons as a marker regarding the condition of your most valuable investment.

Insurance Policies and Coverage Issues, Sinkholes in the News

Is Catastrophic Ground Cover Collapse Coverage Enough?

What is catastrophic ground cover collapse coverage?

When it comes to sinkhole coverage from your insurance policy, you may be tempted to elect for catastrophic ground cover collapse coverage, as opposed to general sinkhole coverage (which tacks more money onto your premium). The difference between the two is simple: with catastrophic ground cover collapse coverage, you will only be covered by insurance if your home is left unhabitable by a sinkhole opening below your home.

Why this matters to you

While this may not matter to the uneducated homeowner, those who want to protect their home need to be aware. Sometimes, before a sinkhole opens and swallows your home and your family (sometimes literally), your home may express physical symptoms of the ground shifting underneath it.

For example, you may find cracks in the foundation of your home, the walls may be separating from the ceiling, rainwater isn’t draining well from your yard, or a variety of other signs may present themselves. While these symptoms qualify as major damage to your home and are obvious signs of a sinkhole, you will not be covered by your insurance if you do not have the correct coverage; if the ground has not collapsed underneath your home, your catastrophic coverage will not help you repair the foundation of your home affected by a sinkhole!

So catastrophic ground cover collapse coverage will cover an open sinkhole?

Not necessarily. Not all open sinkholes qualify as a catastrophic situation – that’s not the definition, so don’t be caught unawares! Catastrophic means that the house is not able to be lived in safely. So, for example, if a large sinkhole opens in your yard, swallowing your car and driveway, your insurance may not cover your repairs. Your insurance company may very well see that the vast majority of your home is safely on the ground and wave you off.

Therefore, I cannot reiterate enough the importance of having general sinkhole coverage. This can result in a dangerous situation for you and your family, plus put you hundreds of thousands of dollars in debt for necessary repairs.

Stay on top of your payments

Even if you do opt for general sinkhole coverage, be wary that if you fail to pay your premium on time, your insurance company may revoke your general sinkhole coverage and only provide catastrophic coverage.

Finding Sinkholes, Insurance Policies and Coverage Issues

The Cost of Sinkhole Investigations

My insurance company sent me a letter after I filed my sinkhole claim telling me I may have to pay them $2,500 if they do not find a sinkhole.  Is that true?

Your insurance company is misleading you either because they simply do not understand or they do not want you to pursue your claim.  Either way, shame on them.

As long as there is a “good faith” basis for filing a claim, you cannot be held responsible for the costs associated with your claim.  Understand, there could be liability if the investigation was filed without a sufficient reason to have done so.  The home insurance company bears the burden of proof in showing that property damage did not result from the presence of sinkholes.

To claim or not to claim.

Now, having said that, the standard for whether you could file a claim would mean anything that would be the basis for the claim.  If you found, for example, a crack in a wall, tile, floor, or ceiling, you would have a good faith basis to file your claim.  I once knew an insured who filed a claim without any damage at all, but had filed it because the neighbor had a sinkhole.  In that situation, the Court found a sufficient and good faith basis for what they did.

I can tell you as a sinkhole lawyer, representing both policyholders and insurance companies, no one I have ever met in the business has ever even heard of anyone recovering against a policyholder.  I think the law serves no purpose.  More than anything, I see this used frequently by insurance companies to deter claims, which is not fair.  I suspect this is why no one ever actually recovers from it.

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

Finding Sinkholes

What is the difference between a paleosink and a sinkhole?

What is a paleosink?

A paleo sinkhole can be a technical but important issue that frequently plagues property owners when they receive their engineering report from the insurance company.

The most common presentation of this issue is when the insured is told that “sinkhole activity can be excluded, but that conditions of paleosink or “karst environment have been found.”  Sometimes the reports will state whether or not the property is in a “state of reactivation.”

“Paleo” essentially means “old” in this context.

Sometimes, rather than call these paleosinks, you will see them referred to as “relic sinkholes,” which is a lot easier to understand.  The idea here is that the property was built on a lot where a sinkhole condition had existed some time ago, sometimes even tens or hundreds of thousands of years ago.

After the sinkhole occurred, the area where the surface depression was located filled up with soil and then lithified again into rock.  Oftentimes, because the causes of the sinkhole still exist (for example, a natural spring), the sinkhole is likely to occur again, and is often the reason an insured is filing a sinkhole claim.  The idea of calling a relic sinkhole “reactivated” means that the process of limestone dissolution is again underway.

Limestone in the penetration borings.

The conditions to look for in relic or paleosinks relates to the depth of the limestone in the standard penetration borings.  If, for example, there are two separate borings done on the property, and they both show a great difference in the depth to the limerock, this is a condition often associated with a paleosink.

If you did two standard penetration tests, one hitting limestone at 30 feet, and another hitting it at 42 feet, many engineering firms would call this a paleosinkhole.  If the conditions are then joined with other indicators of sinkhole activity (e.g. loss of drilling fluid, weight of rod, or weight of hammer conditions), it is likely in a state of reactivation.

The difference between a sinkhole and a paleosinkhole is a  complicated, technical issue, but it’s important to know if you have a sinkhole claim that has been denied and these issues are referenced in your engineering report.

Finding Sinkholes, Sinkholes in the News

Sinkhole Tragedy Strikes Canada

I do not like to necessarily post about every sinkhole that is reported in the news, but this is a big one.
Apparently, the geology of Canada is much akin to those areas in the United States impacted by sinkhole activity.

After reading this, I called a geologist who I know has done a lot of work throughout North America.  His comment about Canada is that it has much of the same overall geology as we find in areas in the United States where sinkholes are present.  You are going to look for shallow limestone or clay soil conditions and a rising and falling water table.

Sinkhole activity, he said, is about soil density.  When conditions such as this are present, you can see dramatic catastrophic collapses such as that shown in this video.

Finding Sinkholes, Repairing Sinkholes

Sinkhole Testing On Condos and Apartment Buildings

Sinkhole testing for larger buildings

Question: I am on a condo Board of Directors for our condo, where we had a sinkhole investigation completed. In reviewing the report from the engineering company, it seems to me that they only studied one side of the building.

Are there special rules for larger, multi-unit buildings like apartments or condominiums when it comes to sinkhole investigations?

Sinkhole testing changes depending on building size

Sinkhole investigations very much relate to the size and complexity of the buildings. The larger the building or lot, the more sinkhole testing is required. If you have a condominium complex where a sinkhole investigation is being completed, the investigation should relate in some way to the size of the building.

Ordinarily, most engineering firms will conduct 3 standard penetration tests on a standard home site. Using this as a baseline, while not an exact comparison, I would expect a larger condo property to have considerably more borings on the property.

How many borings should you expect?

We find that some sinkhole engineering firms will do only a limited number of borings, even if the property itself is larger. If a condo or apartment building is 3 times the size of an average lot, you would expect 3 times as many borings.

However, engineering firms may be limited to the amount of testing due to budgetary restrictions. When we get questions about these issues, we will usually ask an independent engineering firm to review the report, not always to challenge the conclusions, but simply to assure that the investigation meets the minimum requirements for larger properties.

Ultimately, if you believe the testing failed to meet your expectations, either as a condo association owner or a member of a board of directors, your feelings are probably warranted. It is important as a member of a board that you act in the best interests of your members, and consider a second opinion to resolve your concerns.

Insurance Policies and Coverage Issues

How to Survive a Sinkhole

How to survive a sinkhole

Sinkholes can be scary situations. Not only is the image of the sinkhole itself enough to scare even the bravest, but the after-effects of the damage that results can be just as upsetting. Dealing with a sinkhole is all about being prepared and being clear about your expectations of how your case will be handled. Continue reading for more tips on how to survive a sinkhole.

Know where you’ll go

If a sinkhole opens underneath your home, there’s a good chance your home will not be habitable until all repairs are complete. Therefore, before it happens, make sure you’re prepared to leave your home. This means knowing where you and your family will go, including pets. Having to find housing within a day of a sinkhole opening is more stress than anyone wants to deal with, so know how you’ll respond before you need to.

Reference your insurance policy

When dealing with your insurance company, it’s imperative that you’re very clear about what your policy will cover. That way, if your insurance company tries to shortchange you in any way, you know to call a lawyer immediately to demand the coverage you deserve.

Make sure you know where you put your copy of your insurance policy. If you do not have one, submit a written request to your company. You should be an expert on your own insurance policy.

Document your home

In the event of a sinkhole, your insurance company is responsible for returning your home back to the state it was in before the sinkhole. This means documenting both the interior and exterior of your home. If you don’t have a sinkhole opening but you found cracks in your foundation or walls, you’ll want evidence of your home without these cracks.

Do not rely on your memory, as the best way to deal with insurance companies is cold, hard, indisputable facts. It’s easy enough to claim that the damage “just appeared”, but some insurance companies will fight you at every turn. Don’t give them that chance.

Above all else, be prepared

The most important lessons I can bestow on you regarding how to survive a sinkhole is to make sure you have all your ducks in a row and know your rights. Be sure to double check your policy for things like refunds on money spent on food and lodging while your home is inhabitable and what types of repairs they will cover. If you’re educated about sinkholes and how insurance companies handle them, you should be able to make the most of your insurance policy.

Insurance Policies and Coverage Issues, Repairing Sinkholes

Sinkhole Claims and Hurricane Season

Pending sinkhole claim vs. hurricane

Question: Hurricane season is just weeks away, and my wife and I are in the middle of a sinkhole claim with our insurance company. Theoretically, what would happen to our claim if a storm were to hit while the claim is pending?

If a hurricane hits

This was a major problem for insureds during the 2004 storm season in Florida. Consider not just the possibility of multiple causes, as you have described, but also the possibility of multiple hurricanes.

In general terms, your home is insured for sinkhole damage, which is why you have the claim pending. Additionally, it is insured for hurricane damage as well. These causes are subject to different deductibles, and many other conditions under your insurance policy.

The fact is, even if your home were to suffer two different perils (here, sinkhole and storm), you are entitled to open up two different claims at the same time. In some situations, you might even be entitled to two separate payments for the limits of your policy. These are general concepts, but here are some guiding principles.

What to know about combining insurance claims

First, you cannot get paid twice for the same damage. If you have cracks in your stucco due to sinkhole settlement, you can get paid for it. You cannot also submit this same damage for payment under the hurricane claim.

However, sinkhole repairs are unique and could be paid for subsurface repairs under a different set of coverage limits. Suffice to say, these claims are complicated, but do happen regularly.

Take preventative measures

I would urge you to document all of the damage to your home and to ask for a copy of any cosmetic estimates prepared to date by your insurance company. Keep these in a safe place, away from the home. Also, consider reading our tips on filing a sinkhole claim.