An insurance contract is simply an agreement. The policy itself contains the terms of the agreement and acceptance of a premium payment binds this agreement. Citizens Property Insurance Corporation is Florida’s largest property insurance provider and as I discussed recently, is exposed to bad faith, according to the First District Court Appeal.


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If you live in Florida, you have seen the media reports over the past year and half exposing Citizens Property Insurance Corporation’s many failures. Citizens’ approach to Sinkhole Loss claims is no different. Florida law requires all insurance carriers, including Citizens, to repair below ground damages and immediately tender the actual value of the above ground damages. Many policyholders participate in the statutory alternative dispute resolution program called neutral evaluation provided by Florida Statute 627.7074. This program requires the Department of Financial Services to appoint a third-party engineer not retained by either party to review subsurface data and issue an opinion whether there is sinkhole activity and how to repair it.


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On June 27, 2013 the Florida Supreme issued an important decision addressing the issue, “whether, under Florida Statute § 627.736, an insurer can require an insured to attend an examination under oath as a condition precedent to recovery of personal injury protection “PIP” benefits? In Nunez v. Geico General Insurance Company,1 the Florida Supreme Court ruled in the negative.


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In prior posts, I explained that in the event of a sinkhole loss, insurance carriers are required to stabilize the land and building, repair the foundation, and pay to repair the above ground damages resulting from the sinkhole loss. After explaining the different methods for subsurface repair, many of my clients become concerned because the stabilization process often causes additional damages to the structure.


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In Florida, when a policyholder reports a sinkhole loss, carriers are required to conduct a subsidence investigation. The purpose of this law is to protect Floridians’ lives and property. In this situation, policyholders are concerned damages to their properties are getting worse, and it is common for them to fear the worst, a catastrophic event.


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Many insurance carriers attempt to force their insureds into subsurface repair contracts based on the carrier’s recommendations. In fact, carriers will refuse to provide coverage for a valid sinkhole claim unless the property owner repairs the property exactly the way the carrier recommends. Interestingly, the carrier will not agree to be liable if the recommended repair fails. This lack of security leaves many of my clients insecure. Many insureds obtain additional professional engineers’ opinions as to the appropriate repair to stabilize the affected property and if the opinions differ from the carriers’, litigation often follows.


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