Tag Archives: pasco county florida sinkhole laws

Insurance Policies and Coverage Issues, Repairing Sinkholes

Tips Dealing with Insurance Companies on Sinkhole Repairs

My insurance company is currently working with a local contractor to repair confirmed sinkhole activity at my house.  During the process, the damages appear to be getting worse, and I am hearing the contractor raise concerns that the repair may not be taking as they had expected.  Any suggestions?

Repairing sinkhole activity, speaking as a sinkhole lawyer, can be complicated, and most certainly is frustrating.

The process takes a long time, often causes even more damage, and there is no guarantee that the sinkhole repair will work.  Most of the time, property owners feel as though they are alone in the process, as the insurance company acts more like a bank than providing good sinkhole insurance for repairs.

First suggestion:  Document the entire process, either by photos or by video. As the process begins, and progresses, you should monitor the process either with a still camera or a video.  I have found that the most common question relates to whether the subsurface repairs are actually causing the damages to worsen, which does occur.  By recording the repairs, you will be able to get a sense of “before and after.”

Second suggestion:  Always raise your concerns with the insurance company in writing, both to your claims adjuster and your insurance agent. Many times, insurance claim representatives have a difficult time separating what is a “problem” versus what is just common frustrations of an insured.  If you submit your concerns in writing, and tell them exactly what you want them to do, it makes it clear you have defined your expectations.  That way, you will both know if the issue has been resolved.

Third suggestion:  Consider hiring your own contractor or consultant to monitor the success of the project. The reason is that the insurance company will almost always have someone there to monitor the project to assure it is being done according to the plans set up by the engineer.  Even if it does cost you some money out of pocket, you will have a better feel if you know an independent party is present to assure the work is being done correctly.

In the end, document the entire process, put your concerns in writing, and hiring a third party consultant will serve you well.  Best of luck to you.

Read our tips on filing a sinkhole claim.

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

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

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.