A Picture is Worth a Thousand Words - Sinkhole Damage and the Florida Legislature
These are actual photographs of damage to the ceiling and walls of one of my client’s homes. A carrier denied this sinkhole claim based on a report from an engineering firm that opined that the damage wasn’t caused by sinkhole activity. In addition to the numerous 2-4” wide openings to the walls and floors of the home, the floor elevation survey revealed a 7.25 inch floor elevation differential. Note that these photos show only a fraction of the actual damage to the house. Indeed, several veteran attorneys on both sides of the case and a well-respected retired judge who mediated the case all agreed that this was one of the worst sinkhole damage cases that they had come across.
Despite the numerous indicators of sinkhole activity and the widespread damage, an engineer hired by the insurance company signed his name to a report stating that there was no sinkhole activity. On April 3, 2010, the Florida Legislature introduced proposed legislation that would make the engineering report in a case like this the gospel truth. Specifically, the new legislation provides a strengthened presumption that the carrier’s engineer or geologist is always right. Yes, that’s what I said – the carrier’s engineer is ALWAYS presumed to be right, even in the face of overwhelming evidence that he is wrong!
Florida Statute section 627.7073 has always included a presumption that the findings of the carrier’s engineer or geologist are correct. That presumption, however, was merely a presumption that could easily be rebutted by a competent counter-opinion. The new proposed legislation, however, goes far beyond a mere presumption, it elevates the presumption and actually shifts the burden of proof to policyholders on sinkhole claims! Nowhere in the long history of Florida insurance law has the legislature ever singled out a specific kind of loss and, year after year, eroded the policyholders’ rights to recover under their policy (a policy that they pay good money for year after year, by the way) for that type of loss. The previous changes to sinkhole claims that provided for neutral evaluation, gave carriers the right to force clients to sign contracts before paying for repairs, etc., were bad enough for policyholders to endure. But now, this? We must put a stop to this type of legislative favoritism to insurance carriers.
The intent of the Legislature in shifting the burden of proof in sinkhole claims shows the Legislature’s allegiance. Legislators state that they are shifting the burden of proof to address “public policy concerns related to the availability and affordability of sinkhole coverage to provide consistency in claims handling and reduce the number of disputed sinkhole claims.” WHAT?? Do you know how many “disputed” sinkhole claims are real, actual, viable sinkhole claims where the carrier’s engineer has stretched the outer limits of creativity in denying sinkhole activity?
In the case above, for example, the home was built in 1972. In 2003, the home was still in pristine condition. Then, in 2006, something happened and the home shifted and twisted and huge gashes and cracks appeared in the house. The carrier’s engineer said that this was caused by shrink-swell clay activity. Note that any clay under the home would have been there since the home was built in 1972. The explanation was laughable and the carrier is actively working on resolving this claim now that they have considered how the engineer’s opinion will fare in front of a jury. Under the new legislation, my client would have a much tougher road to hoe to prove that the insurer’s paid engineer is wrong. I can only surmise from the proposed legislation, that the Legislature wants people like my clients to just go gently into that good night and not question or challenge the carrier’s opinion or stick up for their rights. Is that fair?
Policyholders have a right to free access to the courts and a right to a trial by jury. The proposed legislation throws these rights out the window. It is time that our elected Legislators remember who they are supposed to represent and who they are supposed to protect.
That is an excellent point and hopefully our legislature will see the error of their ways here. I have a current case I am working on with a very well known carrier who hired an engineer to "investigate the merits of our case." When we hired our own engineer to refute the findings of the carrier's engineer, the carrier's engineer filed a professional complaint against the engineer we hired alleging he was perpetuating a fraud. The complaint was clearly an attempt to intimidate our engineer and the professional board dismissed the complaint and stated the complaint should not have ever been filed and wasn't even on point. Unfortunately, this process lasted almost a year and caused a lot of anguish for our Insured and the engineer we hired. I have never seen this before, but it may be an indication of things to come. I can tell you that engineers certainly take these complaints very seriously, as they should. Engineers try to hold themselves up to a high standard and these bogus engineering reports should be reported to Tallahassee.
I recall several losses my firm was involved in the recent past where the insurance company/experts after a "sinkhole investigation" said there were no sinkholes. One was to a large apartement complex where the city condemned one of the buildings with all the rest showing singificant damage. The other that stands out was a elderly retired couple who were told the very visible hole in their front yard was not associated with all the cracks in their home.In fact the whole property was sitting on a sinkhole! In the end both of theses cases were settled for the amounts that should have been paid to these insured in a timely manner.
Mike, It never ceases to amaze me the lenghts that some carriers will go to to avoid paying claims. This situation, though, is one I haven't yet run across. I would like to discuss this further with you if you are willing. It pays to keep on top of the latest trends and tactics used by the carriers. I think it benefits us all if we share informaiton. I look forward to talking with you!
Hi Dick! Your comment is right on point as usual. I really don't think the legislature gets the fact that most of the "disputed" sinkhole claims are sinkhole claims that the carrier should have paid from the get go! The idea that the legislature designed a statute that so completely favors carriers by "reduc[ing] the number of disputed sinkhole claims" is incredible to me. Do they not realize that the real problem lies, not with the "disputed" sinkole claims, but with the wrongful denial of valid sinkhole claims! Thanks for the post Dick!
If you have cracks on the outside walls of your house, is that a sign of sinkhole damage?
What can I do about getting rid of cracks on the out side wall of a home?
Good question. Sinkhole activity usually causes cracking to appear in the structure -- on the walls, ceilings,ets. But, cracking can be caused by many things. Typically the carrier will have to do testing for sinkhole activity if the cracking appears to be consistent with sinkhole damage. The type of cracking that is most often associated with sinkhole activity is "stair step" cracking -- cracks that look like a set of stairs. You may see other types of cracking in addition to or instead of the stair step cracking, though. If you are experiencing new cracking at your home that doesn't appear to be related to any definable incident, i would consider contacting an attorney or a public adjuster to look at your property. I am happy to discuss this with you in more detail if you would like to call my office.
As to your second question about what to do about cracks, i don't have any expertise in repair. I will tell you, though, that i would not do any repairs until you get the damage checked out by someone with experience in these matters. Thanks for writing!