Tag Archives: sinkhole blog

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, Sinkholes in the News

Florida Bills SB 876 and HB 447 Measure Dead in Legislature

Florida Bills SB 876 and HB 447 fail

The heavily industry-weighted group the Heartland Institutes Center has reported the death of the pending legislation it referred to as so-called “reform” measures pending in the Florida Legislature. The Heartland Institute is not an organization I can speak of with any degree of accuracy, as I could only report what they claim on their website.

Having said that, I am unclear as to why they would support bills SB 876 and HB 447. Both of these bills took a great deal away from individual policyholders and diluted protections in place to preserve rights under most insurance policies.

For sinkholes and sinkhole claims, the heart of these bills was to make it easier for insurance defense sinkhole attorneys to defeat the claims of individual homeowners, who are having the sinkhole claims denied and delayed by common investigation and claims adjustment tactics.

Why this is good news

Most of these bills attempted to isolate sinkhole coverage and treat it differently than other, less complicated causes of damage to property (e.g. fire, water). For sinkhole coverage for property losses to mean anything, it must be treated the same as other coverage, for which an insured is willing to pay a fair premium.

While most Florida homeowners do not like paying higher premiums, they do not want to buy illusory insurance coverage that may not actually provide them with the protection they need. Certainly, if a sinkhole claim does end up in court, homeowners simply ask for the field to be level.

These two bills introduced various standards to try and nudge the advantage to the insurance companies, and have been properly abandoned by the Florida Legislature.