As noted in an earlier blog post, many insurance companies are using language included in the 2005 revisions to the sinkhole laws in bad faith. For example, merely because the revisions state that insurance companies "may" holdback subsurface repair money until it is incurred does not provide the insurance company the right to use this provision without considering the best interests of their insured. Although the law specifically requires insurance companies to consider the best interests of their insured as the guiding principle of all claim decisions, the insurance companies are actively, shamelessly abusing this right.
For example, if you have a confirmed sinkhole where the damage is more than your policy limits, many insurance companies are attempting to "negotiate" your coverage. If the estimate comes from the engineering firm as being $100,000, you will get a letter that says the Insurance Company is holding back this money until you get a contract. Alternatively, the Insurance Company is telling you that they will pay you the subsurface, but only if you agree to "discount" the money due. They will pay you $80,000, in cash, but only if you sign a release to waive your coverage in the future and walk away from the remaining $20,000 you are contractually entitled to recover. This is bad faith as the Insurance Company is using their discretion to avoid paying you all you need to recover.
Either they don't know, or they don't care. Regardless, we do.
As someone who use to represent insurance companies for more than a decade before I gave up that practice to solely represent policyholders, I understand (generally) the frustration many insurers felt about bogus claims. However, in a situation like this, where an insured has a confirmed loss but the insurance company is "negotiating" rights under a contract, I scream foul.
If you have questions about any kind of sinkhole loss, or any other claim involving storm damage, fire, or otherwise, we are here to help. TC
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