Like all Americans, Florida home and business owners face their share of risks from fire, lightning, hail, flooding and other common causes of property damage. They also must contend with serious meteorological threats such as hurricanes that homeowners in many other regions seldom experience. But Florida's abundant limestone geology presents yet another source of homeowners insurance claims that residents in most states never have to consider: property damage from sinkholes.
Sinkholes do not have to be immense, street-swallowing monstrosities to cause damage to Florida homes or other property. A homeowner may first become aware of the telltale effects of shifting or collapsing ground when they notice emerging cracks in the foundation, loosening floor tiles, driveway fissures or stuck windows.
The basic scientific reason behind sinkholes is that bedrock dissolves as rainwater soaks into the ground, but that means little to a family that has detected a growing threat to the major investment they have made in their home. Their primary concern is ensuring that they've protected their Florida property from sinkhole sinkhole property damage with appropriate catastrophic ground cover collapse coverage and that their insurance company lives ups to its obligations to repair damage and prevent future problems.
Recent amendments to Florida insurance laws have changed insurance companies' legal obligations to cover homes, condominiums and commercial buildings damaged by sinkholes. Despite considerable controversy over the effect on insurance consumers, Senate Bill 408 passed with solid majorities in the Florida House and Senate and was signed by Governor Rick Scott last May.
Reforms to Florida Property and Casualty Insurance Law
The comprehensive new Florida insurance law changes several aspects of property and casualty insurance, including statutes of limitation for bad faith insurance claims, as well as revisions to the definition of losses for claims against the Florida Hurricane Catastrophe Fund. With respect to sinkhole property damage claims, homeowners must do more than establish and confirm sinkhole activity at the property and that it has caused specific damage to the structure.
Going forward, sinkhole damage claims must specify certain types of damage as well as the extent of damage, and insurers can require inspections based on neutral evaluations using engineering and construction standards before an insurance company must pay the loss. Other changes include:
- Limiting sinkhole loss coverage after a certain date
- Exempting coverage for sinkhole damage from annual rate increase requirements
- Changes to coverage requirements for appurtenant structures, driveways, sidewalks, decks, or patios that are directly or indirectly damaged by sinkhole activity
The new standards regarding sinkhole structural damage that triggers a policy payout are based on the legislation's stated intent to increase the industry's reliance on "objective, scientific testing requirements." But many homeowners may be surprised at another goal: "generally to reduce the number of sinkhole claims and related disputes arising under prior law."
Protecting the Interests of Insured Florida Property Owners
Florida property owners who responsibly insure their homes, businesses and other structures justifiably expect protection from unexpected damage. The recent changes to legally obligated insurance coverage for sinkhole damaged residences and commercial buildings pose questions and uncertainty for many who are confronted with anything from the first hints of structural damage to catastrophic ground cover collapse.
Policy coverage dispute resolution based on the opinions of "neutral" evaluators under Florida law may not do enough to level the playing field between insureds and insurance companies. One problem is that evaluators are largely employed by engineering firms that get most of their business from insurance companies. The property owner may be considered a one-time "customer" of that same inspector.
More important, the neutral evaluation process under Florida law insulates insurance companies from the punitive aspects of bad faith insurance claims. As one Florida sinkhole claims lawyer put it: "If they do get caught at the NEP (neutral evaluation process), they get a free pass."
Florida sinkhole claims are characterized by complex technical issues and increasingly challenging legal standards. A Tampa sinkhole attorney serves as a vital ally when an insurance company fails to make timely payouts on a valid claim.
Contingency fee arrangements make experienced legal advice easily available and affordable to property owners. The same legal representation is available to clients who are concerned about inadequate compensation from policies for life insurance, homeowners liability coverage, disability policies and other types of damage to homes and businesses.
