Florida’s sinkhole problem is well documented; however, a common problem related to sinkhole claims is not discussed enough. Many carriers improperly nonrenew insurance policies after an insured reports a sinkhole claim. Just today, for example, Olympus Insurance Company nonrenewed a client’s policy, despite confirming a sinkhole loss just one month ago. My client’s neighbor reported a sinkhole claim, and the neighbor’s carrier recognized coverage for the claim. Repairs were completed. During my client’s claim, my clients informed Olympus Insurance Company of the neighboring sinkhole. Olympus tested my client’s residence for sinkhole activity and confirmed a sinkhole loss. Today, my client received a Notice of Nonrenewal for “Proximity to sinkhole.”
As you can imagine, my client called me, confused and asking the following questions:
- Why is my carrier nonrenewing my policy for reporting my claim?
- I have been insured with Olympus Insurance Company for years and this is my first claim, can they do this to me?
- How can I obtain insurance with a pending sinkhole claim and hurricane season just weeks away?
- What am I supposed to do?
- Can you help?
I explained the carrier is acting inappropriately and in bad faith, but I could help. Florida Statute 627.707(7) states the following:
An insurer may not nonrenew any policy of property insurance on the basis of filing of claims for sinkhole loss if the total of such payments does not equal or exceed the policy limits of coverage for the policy in effect on the date of loss, for property damage to the covered building, as set forth on the declarations page, or if the policyholder repaired the structure in accordance with the engineering recommendations made pursuant to subsection (2) upon which any payment or policy proceeds were based. If the insurer pays such limits, it may nonrenew the policy.
I immediately notified Olympus Insurance Company’s representative and informed her I would be filing a Civil Remedy Notice if the Notice of Nonrenewal is not lifted within the next seven days. Hopefully, Olympus Insurance Company will realize its mistake and do the right thing.
Unfortunately, Olympus Insurance Company is not the only carrier that wrongfully nonrenews policies in direct violation of Florida Statute 627.707(7). If you run into this problem, please contact your insurance agent or experienced legal counsel who will fight for your rights and hold your insurance carrier responsible for its improper conduct.