Tag Archives: Sinkhole Damage

Sinkholes and Solutions for Property Owners

As a homeowner, is there is solution to the sinkhole problems and damage we read so much about?

The most any property owner in Florida can do about sinkholes is about as muchFlorida Sinkhole Problems and Solutions as a California property owner can do about earthquakes. While there are things we can do as communities to avoid creating these problems, the individual homeowners must focus on gathering as much sinkhole information as possible so they can protect their investments. Certainly, the news was flooded with reports about Plant City sinkholes caused by the over-pumping of water near strawberry fields, which triggered a lot of damage. We are also aware of homes being impacted by neighborhoods known for sinkhole activity, most of which is now a matter of public record.

Sinkhole Information is Key

In the end, people can find a sinkhole solution by making informed decisions about the homes they purchase, and the insurance they buy. Right now, there are rumblings among insurance companies that there will be significant changes to the sinkhole laws during the next legislative session. Most of these changes are not designed to offer solutions to the sinkhole problem but instead are focused on economic and politic problems most homeowners just do not care about. Although a lot of people want to talk about the sinkhole “problem” being the claims, I do not think this is the issue.

It’s the Home, Not the Homeowner

If we were to really focus on the how this problem began, it would have been decades ago when most of the construction occurred. While most of the community developers were aware they were building homes in areas where sinkhole problems were likely, they built the homes without doing any pre-construction testing, nor did they even consider modifying the foundations to try and avoid settlement damage. Now, homeowners are buying those houses, and are relying upon the insurance they purchased to recover their losses. This does not make the claims “bogus,” as many are suggesting. Instead, it simply means that insurance companies are making considerably less money than they always have, and must now pay claims.

Be forewarned, that there will be change next year, and we will be watching from here. Visit us frequently so you can have your input into the new laws.

Read our tips on filling out a sinkhole claim.

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

Sinkhole Damage Diminishes Home Values

What can I do about the lost value of my sinkhole home?

Unfortunately, insurance policies and Florida law do not allow for recovery of loss of value to your property. This is an extraneous consequence of having a sinkhole claim that insurance contracts and insurance companies do not take into consideration.

This is a cold business with a cold approach. Insurance companies do not take human factors such as diminution of value of the home, inability to find insurance again or time missed from work to be present for the numerous inspections into account. These are things that you will not recover under the contract. These are things that we hope juries pick up on and take into account when determining the damages to a homeowner.

Repairing a sinkhole home does significantly increase the value of the home but, is unlikely to recoup 100%. The good news is that as sinkholes become a more integral and accepted risks of homeownership in Florida, buyers seem to be a little less bothered by the sinkhole stigma as in years past. Keep in mind that there may be some additional coverages or damages that can be payable for over charged premiums or the cost to move out in some circumstances, so there may be a light at the end of the tunnel for certain homeowners.

Read our tips on filling out a sinkhole claim.

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

Sinkhole Repairs for Other Structures on Property

Other than the property coverage provided for under my insurance policy, does my insurance policy cover sinkhole repairs for other things, such as my driveway and other parts of my home?

Quite frequently sinkhole damage can occur to areas of an insured property that are separate and apart from the dwelling residence. Depending on your policy, there may be coverage for additional structures on the property. Typically, this would potentially include a guesthouse, driveway or other permanent improvement to the land.

In our experience, insurance companies will sometimes attempt to include the sinkhole repairs to damages for additional insured structures under the coverage for the main dwelling residence. This unfairly deprives the insured of other available coverage, which is separate from the insurance for the dwelling on the insured property.

For instance, an engineer hired by the insurance company confirmed sinkhole activity affecting the property and prepared a  sinkhole repair plan calling for grout to be injected under several points under the driveway. This grouting, by necessity, involved the separately insured other structure (the driveway), yet the insurance company failed to apply the other available coverage to this portion of the sinkhole repair. Instead, the insurer unfairly attempted to “lump” this segment of the sinkhole repair under the coverage for the main dwelling.

We provide analysis and answers to our insured clients about this and many other types of insurance policy questions.

Read our tips on filling out a sinkhole claim.

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

Your Duties in a Sinkhole Claim Investigation

After I filed my sinkhole claim, the company contacted me and asked that I participate in an “examination under oath”? What is this, and am I required to do so?

Nearly every insurance policy has contractual language that requires the insured homeowner to cooperate during the investigation of a sinkhole claim by the insurance company. At times, an insurance company may request their insured to submit documentation and to provide a statement under oath concerning the facts of the claim.

Although this type of request during the initial investigation of a sinkhole claim is uncommon, when such a request is made, you must cooperate with the insurance company. This duty to cooperate includes providing sworn statements (an examination under oath) as well as responses to reasonable requests for documents.

Sometimes this type of investigation is premised on the theory that there was a prior sinkhole claim or that there is factual information necessary that the insurance company does not have in their possession. Regardless of why the insurance company makes these requests to substantiate your sinkhole claim, you ordinarily need to fully cooperate to the best of your ability. We have appeared at countless examinations under oath, and we know what to expect. Please contact us to discuss your legal options and to how to best protect your rights under the insurance contract and Florida law.

Read our tips on filling out a sinkhole claim.

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

Sinkholes and Application Defenses

Recent Question: My insurance company hired an engineering firm, who found sinkhole activity at my home. Immediately after we received the report, we were instructed to appear at a law firm to bring documents including tax returns, the closing documents at the time of sale, and a bunch of other things. Can they do this? Continue reading Sinkholes and Application Defenses

The Effect of Past Sinkhole Claims on a Current Sinkhole Claim

Question: After I discovered damage to my home that I thought might be sinkhole related, I found out my house had confirmed sinkhole activity before I bought it. Does this impact my sinkhole claim?

What to know about past sinkholes on your new home

If a property previously experienced sinkhole activity or was involved in a sinkhole claim, the insurance company will attempt to defend the new claim by alleging the damage is all pre-existing or was related to the past claim. A seller of property in Florida who made a prior sinkhole claim or received any settlement proceeds for a sinkhole claim will need to fully disclose the relevant details of the claim to the purchaser of such property. This would include:

  • A description of the magnitude of the sinkhole damages
  • The extent of any repairs completed at the property
  • The amount of the sinkhole claim settlement proceeds that were utilized for any repairs

An insurance company will want to know the information concerning the past sinkhole claim and if the dwelling demonstrates new evidence of continued progression of damage due to the past failed repair attempt. Having the details of any past sinkhole claim is critical to pursuing any renewed or new claim by the insured homeowner.

As long as the insured honestly puts forth all noteworthy facts to his/her home insurance company and discloses all material information about the history of the home, there should be little reason for an insurance company to not perform a fair investigation into the sinkhole claim.

Because of our experience working for the insurance carriers, we are familiar with certain tactics frequently employed by the insurance companies in fighting sinkhole claims, and we know what to expect.

Please contact us to discuss your legal options and to how to best protect your rights under the insurance contract and Florida law.

Florida Sinkhole Statutes Regulate Investigations

How sinkhole coverage is investigated

Question: If I file a claim for sinkhole coverage, what kind of investigation does the insurance company have to perform?

The Florida sinkhole statutes relating to investigations for sinkholes are very precise. These statutes require certain particularities concerning the professionals who must perform the subsidence investigations, as well as the methods and standards involved in the tests to determine the presence or absence of sinkhole activity.

What insurance will do

Some insurance carriers believe they can merely “look” at your property to make this determination or they hire an outside company to “look” at your property to determine the presence or absence of sinkhole activity, without conducting the costly testing required by Florida’s sinkhole statutes.

However, a “forensic structural investigation” is an untrustworthy, less expensive alternative relied upon by some insurance carriers, and there is typically no geotechnical data to support any competent opinion concerning the subsurface conditions at the insured property.

What you need

We are thoroughly familiar with the proper testing methods, which are vital to determine if damage to a structure is related to sinkhole or settlement activity, and we are able to address the shortfalls and deficiencies in most investigation reports.

That being said, if your insurance company has come up with an analysis of your property that is raising red flags, do not hesitate to contact a lawyer to ensure you are getting the attention you are entitled to from your insurance company.

Partial Underpinning Dangerous Approach to Fixing a Sinkhole

Is partial underpinning an adequate approach to fixing sinkhole damage?

Other than denied claims for sinkhole damage (or “sink hole” depending on whom you ask), the most common question relates to how one fixes a sinkhole, whether it be in the yard or beneath the home.

When a sinkhole is fixed by partial underpinning

We spent the better part of a day this week on a case I believe worth writing about. A homeowner we represent in Ocala had a sinkhole “fixed” previously, by the use of grouting and underpinning. However, only part of the perimeter of the home was actually stabilized with underpinning.

Instead of underpinning the entire home, the insurance company’s engineer firm had instructed the insurance company to only authorize the use of six pins, to stabilize one-fourth of the home, where the damage was the worst.

Why partial underpinning doesn’t work

The easiest way to describe this cheaper approach to fixing a sinkhole would be to consider the structure of a dining room table. A table has four legs and a tabletop. The tabletop rests on the four legs, with the weight distributed evenly down the legs. If one of the legs is too short, the table will wobble. If one of the legs is missing then the table will likely fall.

The same principle applies to how to fix a sinkhole. The reason you use underpinning is that you are taking the weight of the home and removing the weight from the surface to a deeper area where the soil is stable. If you only pin portions of the home, you are now altering the weight of the home, with portions of it on the surface and the other weight being moved to the deeper soil material.

The problem is that now you have a two- or three-legged table, with areas moving, and others not. This tends to torque the house and cause other damage.

What engineers believe

We consulted multiple engineering firms – even some who work for insurance companies – and they all agreed that partial pinning was not the best approach to fixing this sinkhole. We presented these opinions to the Citizens Property Insurance Corporation representatives and hoped they listen.

Ocala Sinkhole Swarm

Sinkholes in Ocala

In a turn of events that is almost reminiscent of Plant City sinkholes earlier this year, Ocala is seemingly under attack by sinkhole activity. Again and again, we have talked about the huge breadth of the sinkhole activity in Ocala and now we can see it at the surface.

The most publicized sinkhole is near the Fore Ranch area and began as a 28-foot wide monster and now has grown to a 50-foot behemoth! Apparently, this one is not alone as there have been at least three other cover-collapse sinkholes develop in the Ocala area in just a matter of days. City officials blame the heavy rains for the collapses and note that the water level in adjacent retention ponds has dropped six feet since the collapse.

Who has to foot the bill?

Fore Ranch will likely have to pitch in on the repair bill. Luckily, at this point, no homes appear to be in danger but roads have been closed causing hassles and headaches for those in the area.

The city has apparently hired Geotech to perform an investigation and begin repairs. We are familiar with Geotech and are a very capable company that should do a good job taking care of this problem.

How sinkholes affect the area

The long term question is what effect will this have on the homes and businesses in the area. That remains to be seen but nearby residents should surely keep a vigilant watch and report any signs of movement immediately.

On a side note, a former client of ours who recently resolved a sinkhole claim on his house in Ocala just moved to this area to get away from sinkhole problems.

Material Misrepresentation in Insurance

What is material misrepresentation in insurance?

When filing an insurance claim, it might be a shock to be informed that your insurance company is attempting to assert a material misrepresentation defense against you, instead of interviewing you about your claim. So what is material misrepresentation in insurance? Should you be concerned?

When your claim can be canceled

In the state of Florida, an insurance company may rescind (or cancel as though it never existed) your insurance policy if they determine you have mispresented the underlying facts of your home and its history. If your insurance company believes that you withheld facts from them that would either cause them to deny your policy or charge you a higher premium, they can state they are not obligated to cover your claim or even your policy.

While this is a scary thought, keep in mind that while they may feel this is within the realm of possibilities, they must prove that you purposefully lied to them, and this is very difficult. This is because they must prove that you specifically told them something in your description of your home that was untrue.

What qualifies as lying?

This is where you’re likely in luck. As aforementioned, they must prove that you reported something that was untrue. Therefore, if your home had prior sinkhole damage but you didn’t know, you cannot be held liable for this information.

Second, you cannot be held liable for information that the insurance company did not ask for. If, for example, you were aware of a sinkhole that had opened next door to the house, but the insurance company never asked if there was a sinkhole next door, you cannot be held responsible for the insurance company’s negligence. It was their duty to get a well-rounded picture of your home, not yours!

Third, only information that has been confirmed and stated can be used against you. For example, if someone advised that “you better have that checked out” in reference to a crack in the foundation, it does not state that there are any issues with the foundation, nor any history of issues. There is no reason to expect a layperson to understand what a crack in the foundation might mean so it cannot be assumed that you withheld information.

Your home’s background is the insurance company’s responsibility

The basic idea is that material misrepresentation in insurance cannot be claimed about information that your insurance company did not directly ask you for. As long as you answered all the questions that were presented to you to the best of your ability, you have no reason to be concerned about your claim or policy being canceled.

While insurance applications tend to be ambiguous and poorly written, it must be proved that you outright lied in order to confirm material misrepresentation, and this is very difficult to do.

Once they press you for whether or not you told them any particular facts about the home, questions like the following arise:

  • Did they inspect the home?
  • Was the appearance of the damage normal for homes of its age?
  • Did you buy the home for a reasonable value?

If you bought the house at its actual market value and later it is determined the damage was sinkhole related, who would believe you would do this intentionally?