Florida sinkhole insurance bill gets a mixed reception
Florida lawmakers have passed a bill that promises to make sinkhole insurance more affordable and accessible for Floridians, according to the Miami Herald. The bill will allow insurance companies to offer limited sinkhole coverage that could help protect policyholders from damages caused by sinkholes that are considered less than catastrophic. The bill is meant to respond to criticisms that current sinkhole insurance is both too expensive and too difficult for homeowners looking to file claims. This current bill, however, is itself being criticized for not going far enough to protect consumers.
Sinkhole insurance laws
As the Orlando Sentinel reports, changes in Florida state law in recent years have made it extremely difficult for homeowners to file claims for sinkhole damages that are categorized as anything less than a catastrophic collapse. Although large sinkholes that destroy homes gain plenty of media attention, experts note that many smaller, less catastrophic sinkholes can cause serious damage to a property, such as cracks in the walls or foundation.
Florida’s sinkhole insurance laws were changed following complaints by insurers of potentially fraudulent claims. While the legal changes have resulted in a drop in claims for sinkhole damages, critics contend the law is now overly favorable to insurers at the expense of homeowners. Smaller sinkholes, for example, may not be visible from the surface, which can make it frustratingly easy for insurers to question whether structural or cosmetic damage is a result of sinkholes at all.
A new legislative proposal is attempting to address problems with sinkhole insurance in Florida. The bill (SB 1327) would allow insurers to offer limited sinkhole insurance options that would cover some of the damage caused by sinkholes – such as foundation repairs or building stabilization – but which falls short of being considered catastrophic damage. The policies would not necessarily cover contents of the home that were damaged by a sinkhole.
While the changes could make sinkhole insurance more affordable, the bill still has plenty of problems, according to consumer protection advocates. For one, insurance companies would not be obligated to provide limited sinkhole insurance coverage. Furthermore, insurance regulators worry that the new policies may be exempt from being filed with the Office of Insurance Regulation (OIR). That exemption means the OIR would have difficulty verifying that limited sinkhole policies were being offered at appropriate rates.
The damage caused by sinkholes can be devastating, yet as the above article shows filing a successful claim can be difficult. Due to laws that favor insurers, a claim for sinkhole damage could be denied. For people whose property has been damaged by a sinkhole, it is important to reach out to an attorney who is experienced in handling sinkhole claims. Such an attorney will be best suited to represent the interests of homeowners and help them stand up to the insurance companies.