After yesterday’s legislative session in Tallahassee, it appears the Florida House of Representatives’ final vote on House Bill 129 – commonly referred to as the “Citizens Sinkhole Repair Bill” – may take place as soon as this Friday, April 11th. The proposed legislation seeks to change certain aspects of Florida’s sinkhole law, though only for claims submitted to Citizens. The most notable (and controversial) change is the mandatory “Citizens Sinkhole Repair Program.”

As noted in the Staff Analysis, the mandatory “Citizens Sinkhole Repair Program” requires policyholders to choose from a list of contractors within a specific time once a sinkhole loss is verified. The pool of contractors is approved by Citizens and must be “competitive and inclusive.” However, a pool with at least 12 contractors would be presumed competitive and inclusive.

In addition, sinkhole repairs under the proposed mandatory program are not an election to repair. In other words, if Citizens chooses to repair the property, the insurance policy does not change to a repair contract (i.e., no policy limits). If Citizens’ engineers determine the cost to perform the sinkhole repairs exceeds the policy’s limits after repairs have begun, Citizens can chose to pay out the policy limits. If policy limits are paid, the repair work performed under the program stops.

The Citizens Sinkhole Repair Bill would also affect sinkhole claims that are litigated in court. Stabilization repairs must be completed within a reasonable period of time after a court order has verified the sinkhole loss and adjudicated whether repairs must be made, including repairs other than or in addition to those recommended by Citizens’ engineer. Once the repairs are completed, the policyholder has only 45 days to notify Citizens of any “dissatisfaction” regarding the effectiveness of the repairs.

Now, as you can probably imagine, the Citizens Sinkhole Repair Bill has already faced a lot of criticism from legislators in Tallahassee – and there is still a long road ahead. Even if House Members approve the bill, it must then pass the Florida Senate before it would be sent to Governor Scott for his signature to become law. Of course, we will be following this matter very closely and keeping you informed of any important updates. Make sure to also read Sean Shaw’s post, 2014 Legislative Session, for additional resources regarding this and other insurance-related bills in the House and Senate.