Tag Archives: Pinellas County

Insurance Policies and Coverage Issues, Repairing Sinkholes

Grout Cracks and Sinkhole Damage

What causes grout cracks, and how do I know if they’re the result of sinkhole damage?

Sinkholes and sinkhole activity are associated with the movement of soils, into areas created after the underlying rock is dissolved. When the rock beneath the home deteriorates, it weakens and fails to provide the support needed from the initial construction of the home, causing grout cracking, among other problems.

In so doing, the house no longer sits on a level, competent base but instead is prone to shifting, settling, cracking, and even heaving, as the weight distribution in the foundation occurs. This is why sinkholes may actually cause some portions of the home to appear to rise, as the foundation is pushed upwards toward the sky. This is because another, less prominent area is shifting down and causing the other area to rise.

Grout Cracks in Some Counties Are More Suggestive of Sinkhole Activity

For most homeowners, the damage can be very subtle. In counties where sinkhole damage is common – such as Marion, Hernando, Pinellas, and Pasco – homes are most likely to present cracking in unusual places, such as at wall joints in the interior, or in stucco on the exterior of the structure. The significance of this is that the home is losing the support provided by the soil beneath the home, causing the perimeter to shift and crack.

Observing grout cracks in a “stair step” formation on the exterior of the home along the grout lines of block is a significant sign of sinkhole activity. While counties or cities like Marion or Ocala often have other, plausible explanations for such damage (e.g. expansive clay, organic soils, loose surface soils), these alternative explanations do not rule out sinkhole activity as a cause. Most often, these kinds of other causes are working side by side, to create the appearance of sinkhole damage.

What is a sinkhole, according to Florida law?

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

Insurance Policies and Coverage Issues, Sinkholes in the News

You Might Lose Sinkhole Coverage in Florida

Sinkhole coverage in Florida

You’ve purchased a home in Florida. You’ve been recommended a couple insurance policies, you’ve looked them over, and chosen one that you’re happy with. You shouldn’t have to worry about your coverage as long as you pay your premiums on time, right? Unfortunately not. As of January 1, 2010, you may lose your sinkhole coverage in Florida if you don’t pay attention.

Keep an eye on renewals

Homeowners insurance policies are annual policies that renew from the annual date you purchased them. Most of the time the process is without incident as homeowners usually pay their insurance through the escrow with their mortgage company.

When the policy renews, you will receive a notice from the insurance company about 45 days before the new period with changes noted in a large stack of endorsements, which are specific changes that will be made to the policy.

These are usually accompanied by a list of endorsements that apply as well. You can peruse these, and then decide whether or not you want to change the coverage. Of course, it’s generally advised that a homeowner looks over their policy even if they don’t wish to change it, but many don’t.

Don’t get tricked

For homeowners in Pinellas and Hernando Counties, a very significant thing occurred as of January 1, 2010. Due to a new law signed, there will be an automatic change to all homeowners policies in these counties. Under the new law, you will automatically lose your sinkhole coverage, unless you request that it be included into your policy.

Unlike other perils, such as fire or hurricane, the State of Florida is playing a game of cat and mouse – but only with the homeowners in these two counties. This was arguably because Citizens Property Insurance used their lobby to get the Florida Legislature to see how many homeowners they could catch who do not read their annual renewal notices.

It begs the question why they did this in two of the most common areas where sinkhole activity is found. Of course, they did it so that Citizens and other insurance companies can avoid their legal responsibility to offer sinkhole insurance coverage.

If you lose your sinkhole coverage in Florida

If you fail to notify your agent before your coverage lapses, you’re stuck in a pickle. Most companies are requiring that any insureds who allow a lapse in their sinkhole coverage can only get it back by paying for a cost-prohibitive sinkhole investigation. These cost between $8,000 and $12,000.

However, if you do one, in the hopes of getting coverage back, and the investigation finds some evidence of sinkhole activity of which you had no prior knowledge, you are most definitely going to be denied coverage. As you can see, insurance companies are handing you a double-edged sword if you don’t watch out.

Sinkholes in the News

Write to Representative Bryan Nelson and tell him to Withdraw House Bill 1447

Bryan Nelson’s plans for Florida sinkhole insurance

Representative Bryan Nelson has sponsored House Bill 1447, which seeks – among other things – to limit sinkhole insurance coverage to 25 percent of the limits provided for in a policy. For example, if the coverage is $150,000, you would only be provided $37,500 for the repair of a confirmed sinkhole at your home.

This is an obvious attempt to permit insurers to continue to collect premiums for sinkhole losses, while at the same time offering them virtually nothing by way of real money to fix your home. This is tantamount to telling someone who bought a car that their car insurance will only cover 25 percent of the actual value in the event the car is in an accident.

What should happen

Representative Nelson does not live in a community where sinkholes and sinkhole activity are a threat to the value of his home. For other communities like those in Pinellas, Hernando, Pasco, and Marion, this bill not only exposes homeowners to significant, uninsured losses but also violates our freedom to contract with an insurance company.

If I want to buy the insurance and the insurance company wants to sell it, Representative Nelson and the other pro-insurance lobby representatives should stay out of the way.

How to speak up

I would encourage people to write to their own representatives, and tell them to vote against House Bill 1447. (Search for your representative by address.) Additionally, I would write to Representative Nelson and tell him to stay out of our business in the other counties where sinkholes are a significant problem. If you want, just print out this page and mail it to him.

Send your letter to:

Representative Bryan Nelson
214 House Office Building
402 South Monroe Street
Tallahassee, Florida 32399-1300

The purpose of this move is to take money out of the wallets of homeowners and line the pockets of insurance companies and their constituents. Raise your voice and protect your insurance coverage from this change.

Sinkholes in the News

Sinkhole Attorney Morgan Barfield Appears on Channel 10 News To Discuss New Legislation Designed to Limit Sinkhole Coverage

I spoke last week to a reporter at Channel 10, discussing the new Bill 1447 by Representative Bryan Nelson and why I think it is bad for Florida homeowners. Under the new legislation, residents will automatically lose their sinkhole coverage, unless they request that it be included into their policy.

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To learn more about how Bill 1447 will hurt residents in Pinellas and Hernando Counties, read my posts, Florida Representative Bryan Nelson Sponsors Anti-Consumer Choice Bill on Sinkhole Insurance and Renewal Alert for Homeowners in Pinellas and Hernando County.

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

Sinkholes in the News

Florida Legislators Reintroduce 2010 Consumer Choice Act

Is the Florida legislature doing anything to resolve the current insurance crisis?

In June 2009, Florida Governor Charlie Crist vetoed the Consumer Choice Act, which would have allowed private insurers to establish rates independent of the Office of Insurance Regulation (OIR). In his veto message, Crist reasoned that the bill would allow larger, private insurers to “cherry pick,” or sell only to profitable policy holders, while forcing smaller, less capitalized companies and state-run insurer Citizens Property Insurance to underwrite riskier policies. This was and is an important issue in the sinkhole claim arena, especially in counties like Pasco, Pinellas, and Marion, where sinkhole activity is common.

On December 9, 2009, Sen. Bennett and Rep. Proctor introduced the 2010 Consumer Choice Act, which includes changes to the previously vetoed act. The provisions of the proposed legislation are as follows:

  • Allows private insurers to use rates different from rates otherwise set by the OIR. This provision, however, does not apply to policies that are subject to consent decrees or other agreements. For instance, the legislation would likely prohibit State Farm from obtaining increased rates for those policies affected by its consent agreement with the OIR allowing for a flat rate increase of 14.8%.
  • Addresses deficits incurred by Citizens Corporation and requires the imposition of uniform policyholder surcharges of up to 15 percent of policy premiums to curb yearly deficits, before emergency surcharges are assessed.
  • Requires Citizens to obtain a signed acknowledgment of surcharge and assessment liability from insureds who obtain or renew their policies.

Supporters of the legislation believe that these changes adequately address past concerns and will allow all private homeowners’ insurers to offer a policy at a rate that the provider believes will adequately protect the consumer.

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