Tag Archives: hernando county florida sinkhole laws

Insurance Policies and Coverage Issues, Repairing Sinkholes

Changes in Sinkhole Laws Impacting Policyholder Rights – Part 2

New legislation would put higher burden on insured homeowner, not the insurance company, to determine whether sinkhole activity is present.

One of the most material changes proposed in FL House Bill 447 relates to who has to prove the existence of or non-existence of sinkhole activity.  Under current law, the homeowner is entitled to file an insurance claim to determine whether the damages present at the home are covered by the policy.  This is true for all claims, whether sinkhole related or not.

Once the claim is received, the insurance company is required to retain an expert, who provides an opinion regarding the presence of sinkhole activity and provides specific recommendations regarding how to fix the sinkhole property. Note, the insurance company’s engineer can investigate as they see fit, within their professional discretion, and is not obligated to conduct any particular tests, and they are permitted to interpret the information however they want.

The Problem with the New Bill

It simply places a huge monkey on the back of a policyholder.  Specifically, if you, as a homeowner, want to dispute the findings of the original engineering firm, you can hire your own expert.  Even if your expert does more advance testing, provides a more cohesive explanation for the damage, the insurance company gets the benefit of the doubt.  This is because under the proposed statute, any findings of the original engineering firm are “presumed correct.”  Meaning, if the case were to go to a jury, the jury would be told that they must “presume” that the findings of the original engineering firm are correct, even if there are material, significant discrepancies in their findings.

And, if that were not enough, the jury would also place a higher standard of proof on the homeowner, by requiring a higher evidentiary standard for the homeowner.  Rather than spend a bunch of type on this issue, it means that at trial, a homeowner and an insurance company are not treated equally.

Instead, the insurance company is permitted certain presumptions, none of which are available to a homeowner, who must prove their case to a higher degree than the company would under the same situation.  It is simply unfair, and I hope this bill never makes it to the Governor”™s desk.

Please share with us your thoughts on this bill.  Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Changes in Sinkhole Laws Impacting Policyholder Rights – Part 1

Can you explain pending legislative initiatives by Florida insurance companies to limit policyholder rights under common homeowner policies?

New Legislation would remove the rights of homeowners to participate in the selection of the methods to be used to repair their properties. Under current law, prior to the commencement of a repair method to resolve sinkhole problems, insurance companies are obligated to consult with the homeowner regarding the manner in which the home will be fixed. This would seem intuitive (it’s your home – shouldn’t you have a say as to how it is fixed?). This is preserved under current law, in . The pending bill on this issue, House Bill 447 would strip this from the law, and permit insurance companies and the engineering firms they retain to determine how your home is fixed. Instead of requiring some form of input from you, the insurance company need only “provide notice” to you regarding how the home will be repaired.

This process removes the homeowner from being provided an opportunity to select the methods to be used in repairing the home. In fact, if the insurance company was to suggest one method, but you retained an expert who would suggest another, they can ignore your request. There would appear to be no real reason to do this, given that the allegation of “fraud” we often hear about people filing sinkhole claims relates to people filing “bogus” sinkhole claims. If, however, we have a home where sinkhole activity has been confirmed, it was clearly not bogus. Instead, the issue is how to fix a home where sinkhole activity has been found. More than anything, this portion of the bill is more punitive than anything else, and removes homeowners from the process. In fact, what if the insured wanted to follow a less expensive method, but wants to do so because of the potential impact particular repairs will have on your home? In the end, I would urge anyone who is interested to ask that this bill stop in its tracks. Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Renew Your Sinkhole Insurance Coverage

Don’t forget to renew your sinkhole insurance coverage

Pursuant to a new law effective January 1, 2010, homeowners in Hernando and Pinellas Counties will automatically lose their sinkhole coverage.

In order to maintain it, the insured must notify the insurance company at the time of renewal.  If you are like most insureds, you do not pour over your renewal notices, merely to determine if the insurance is the same as before.

The change you want to prevent

While moving from standard sinkhole coverage to catastrophic coverage will save you on premium, it will be a catastrophic loss if your home has a sinkhole.  In order for this new coverage to be of any value, it must cause you home to become so badly damaged that it be condemned.

Seriously – condemned.  It is a requirement under the coverage that a government entity must declare it unfit for human habitation.

This shift has already affected sinkhole claims

Since the new coverage took effect, we have already heard from multiple homeowners caught in this switch.  We even had clients who filed claims and subsequently learned they had sinkhole activity at their homes.

Prior to the insurance company paying to repair the home, the insurance company discovered they were not even aware of the change of coverage and denied the claim.

Imagine, learning first that you have a sinkhole claim (because the insurance company found it), and then that they won’t pay for it.  Nightmare.  Now, you can kiss the value of your house goodbye, unless you want to pay for the repairs yourself.

Be in the know

We cannot emphasize this enough.  If your insurance agent tells you that you do not need sinkhole coverage, fire them and get a new agent.  It is simply too risky in this state, just as it would be too risky to be without earthquake insurance in California.