Tag Archives: Sinkhole Law

Insurance Policies and Coverage Issues

Difference Between Legal and Scientific Definition of Sinkhole

What exactly is a sinkhole?

The reason the word “sinkhole” is one word is that scientifically, and legally, the real issue is not usually whether something is an actual hole in the ground but whether or not it is being impacted by sinkhole “activity.” Because the most common issue associated with sinkhole activity is whether or not it is covered by insurance, Florida legally decided the definition of sinkhole and what constitutes “sinkhole loss.”

Definition of Sinkhole

You can find the : (b) Sinkhole is defined as a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole may form by collapse into subterranean voids created by dissolution of limestone or dolostone or by subsidence as these strata are dissolved.

Definition of Sinkhole Loss

Within the world of property insurance, “Sinkhole loss” is defined as structural damage to the building, including the foundation, caused by sinkhole activity (Section 627.706, Florida Statutes).

In layman’s terms, a sinkhole forms when rock beneath ground dissolves. Soil, due to gravity, falls into the holes in the rock. When the soil moves, the surface shifts, damaging the home.

Difference Between Legal and Scientific Definition of Sinkhole

Oftentimes, the reason why insurance company sinkhole investigations reveal “no sinkhole,” while others say “yes sinkhole,” relates to the differences between the legal and scientific definitions. When Florida adopted the sinkhole definition many years ago because it became an insurance issue, the definition was not necessarily lifted from the scientific literature.

Many times, when we retain experts for our clients, who are either disputing how to repair a sinkhole, or whether there is a sinkhole, the problem comes down to how the insurance company defines sinkhole. Most of the time, we are able to get the insurance company to change their position by demonstrating that you can have a sinkhole loss, even if there is not a large, gaping sinkhole in your yard.

Read my tips on how to file a sinkhole claim with your insurance company.

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

Sinkholes in the News

Burden of Proof Placed on Home Insurance Company

If I file a claim, do I have to prove there is a sinkhole in my yard, or does the insurance company have to prove otherwise?

The Second District Court of Appeal (DCA) recently issued an opinion that held that the home insurance company bears the burden of proof in showing that property damage did not result from the presence of sinkholes. In Warfel v. Universal Insurance Co., the homeowner filed a sinkhole claim with his insurance company after noticing damage to the walls and floors in his home. The insurance company completed a geotechnical inspection pursuant to Florida Statutes §627.707 and found property damage was not the result of a sinkhole. As a result, the homeowner sued his insurance company.

Ruling Puts Burden of Proof for Sinkhole Damage on Homeowner

At trial, the homeowner’s insurance company asked the court to instruct the jury that section 90.304 and 627.7073(1)(c), Florida Statutes creates a rebuttable presumption in which the insurance company”s geotechnical report would be presumed correct, and in which the homeowner would be required to show that it was wrong. The insurance company presented expert evidence from the company that completed the geotechnical inspection, and the homeowner presented expert testimony that reviewed these findings but did not conduct his own investigation. Following the presentation of evidence, the trial judge instructed the jury that the homeowner had the burden of proving property damage resulted from a sinkhole, and the jury found in favor of the insurance company.

Appeal Rules Against Insurance Company

On appeal, the Court found that this instruction was improper because the statute did not demonstrate a clear legislative intent to require the homeowner to bear the burden of proof for sinkhole damage. The dissent pointed to other statutory schemes in which the legislature created rebuttable presumptions that shifted the burden of proof without expressly stating so.

Similarly, it found that section 627.707 of the Florida Statutes created uniform geotechnical investigation procedures so as to address the economic challenges of increased filing of sinkhole claims. According to the dissent, the majority approach is illogical because it allows the homeowner to overcome the presumption of correctness given to the insurance company’s geotechnical opinions by obtaining experts to review but not conduct their own independent investigation.

Benefit of Ruling to Homeowners

The holding in Warfel gives homeowners an advantage at trial in sinkhole-related suits. Judges are no longer allowed to instruct jurors as to the presumption of correctness for insurance companies geotechnical reports, even in light of a homeowner”s presentation of conflicting expert testimony.

Read my tips on filing a sinkhole claim.

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

Repairing Sinkholes

What To Do About a Failed Sinkhole Repair

My home was repaired for sinkhole settlement about two years ago. I was relatively happy with the repairs, although it took forever to complete. But now I’m noticing additional cracking in places where we had damage before and some other places as well. What should I do?

I would notify your insurance company immediately – not necessarily because you are in danger, but because you want to put them on notice as soon as you find damage. It is not uncommon for homes repaired by sinkhole damage to have subsequent damage and sometimes even worsen over time. Depending on how bad the damage is, the insurance company may do additional tests or evaluate the home with other engineers.

This process can get complicated because some sinkhole repairs are only done to stabilize the home and have done nothing for sinkhole activity elsewhere on the property. There are cases where the home, after being repaired, is declared a “total loss” or a “failed repair.” If this happens, you still have rights under the policy and may be able to get additional coverage amounts for the new damage.

If, however, the home is declared a failed repair, you may be entitled to the limits of your policy, regardless of how much was paid to repair your house. (Read my blog post, The Failed Sinkhole Repair, to learn more.)

The sinkhole laws in Florida are very favorable to the insureds and place the burden of repairing the home properly on the insurance company, even if you signed the construction contract. In 2005, the Florida State Legislature made a big push for people to repair their sinkhole-damaged homes. The downside of that for insurance companies was that more houses got repaired, which increased the number of failed repairs. When that occurred, more people were able to make second claims, many of which forced the insurance company to pay their limits again.

Again, call your insurance company. If you have a new insurance company, call both the one who paid your claim and also your new one. That way, everyone knows what is going on.

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

How to Handle Living Expenses in Your Sinkhole Claims

If I have my home repaired for sinkhole damage, can I include the living expenses I incur while the repairs are being done in my sinkhole claim?

After an insurance company confirms a loss has occurred, the repairs to the property then follow. This phase of the sinkhole claim process is lengthy and wrought with obstacles to the insured. Primarily, an insured may have additional living expenses that are incurred due to temporarily vacating the residence during the repair work. Many of our clients cannot afford to continue to pay their monthly bills in addition to the costs of staying in a rental home or hotel during the completion of the repair work at their home.

A brief review of an insurance policy will identify whether such additional living expenses are provided, the limits of any such coverage, and how any such expenses will be reimbursed by the insurance company. These costs to the insured that are incidental to the repair work being performed are typically not paid by the insurance company until they are incurred (and not unless the insured demands payment for these covered expenses). In order to substantiate a sinkhole claim, it is important to save all receipts and other supporting documentation of any additional living expenses that may arise during the timeframe the insured is unable to reside in the home due to a covered sinkhole loss.

Read our tips on filling out a sinkhole claim.

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

Repairing Sinkholes

When Expansive Clay Soil Damage Constitutes a Sinkhole Claim

Are there common causes of settlement damage?

During most sinkhole investigations, engineering firms examine the deeper soils as well as the soil material in the shallow areas near the home. Sinkhole activity requires deeper borings, to depths as deep as 100 feet below the surface. The limestone is the primary area of concern, with an examination as to whether the rock is dissolving. At the same time the limestone is being examined, most engineering firms will also do shallow borings, called hand augers, to extract the surface materials for expansive clays or organic material. (Read more about what constitutes a sinkhole.)

Things to Keep in Mind if Expansive Clay Soil Is Found

The issue of expansive clay soils, or “shrink swell” clays is a common distraction for deciding whether a home is being impacted by sinkhole activity. If you or someone you know has been told there is no sinkhole activity and the damage is being caused by expansive clay, here are the most important things to keep in mind:

    1. Even if expansive clay soil was found at the site, this does not mean the home is not being impacted by sinkholes. This is complicated, but it is associated with the manner in which expansive clay and sinkholes are formed.
  1. Many sinkhole investigations are “denied” claims more because they are incomplete, not because they necessarily excluded sinkhole. Thus, while the sinkhole investigation may not be complete, the presence of expansive clay soil often results in a denial of the claim simply because they found clay near the surface.
  2. Lastly, for expansive clay to be the cause of the damage, several things have to be true:
  • It has to be of a particular kind.
  • It must be at a particular depth.
  • It must be of a sufficient percentage of the soil to actually impact the movement of the home.

Suffice to say, we read a lot of engineering reports where the insurance dispute can be found quickly. If we see something we do not fully understand on technical matters such as this litmus test applied to the presence of expansive clay soils, then we can find an appropriate professional who can assist our clients.

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

Insurance Policies and Coverage Issues

Mediation as a Means to Settle a Sinkhole Dispute

I was told I’m going to have to go to mediation. What is it, and what can I expect?

Sinkhole claims are often resolved in mediation. Mediation is a form of alternative dispute resolution – that is, a method of resolving a dispute that is an alternative to litigation. The parties to a dispute meet face-to-face and attempt to reach a compromise to settle the dispute. Insurance claims may be mediated by agreement prior to the filing of a lawsuit, although that is unusual. Typically, claims are mediated after a lawsuit is filed, and, in fact, courts require each case to go through mediation before trial.

A mediator who is specially trained in helping parties reach settlement agreements presides over the mediation conference. (Many mediators are former judges.) The mediator begins the mediation by describing the process to the parties. Then each of the parties, or their attorneys, describes their position in an opening statement. The Plaintiff or claimant usually includes a settlement demand in their opening statement. The parties go to separate rooms so that they can discuss their positions with their attorneys. The mediator conveys settlement offers between the parties until either a settlement is reached or it is determined that there is no possibility of settling the matter (referred to as an impasse).

Some insurance companies prefer to mediate claims early in the litigation process, while others prefer to wait until a later stage when discovery is complete. Either way, mediation usually offers the greatest chance of resolving a claim or lawsuit prior to trial.

Any settlement reached at mediation is entirely voluntary. The mediator cannot force any party to make a settlement demand or offer and cannot force any party to accept the other party’s demand or offer. One of the most significant characteristics of mediation is that everything said in mediation is confidential. That is, nothing that is said at mediation by any party may later be used in court. This makes mediation the only time in the litigation process where the parties can communicate freely with each other, making it more likely that a case will settle at mediation than at any other time.

Read my 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

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.

Insurance Policies and Coverage Issues

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.

Insurance Policies and Coverage Issues

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.

Insurance Policies and Coverage Issues

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.