Insurance disputes continue over meaning of structural damage

In order to file a successful insurance claim for sinkhole damage in Florida, it is typically necessary to prove that the property sustained structural damage. This can be very difficult because insurance companies often argue that sinkhole damage is only cosmetic, and not structural, in order to get out of honoring claims.

This common debate dates back to 2005, when Florida passed a law that required insurers to provide coverage for sinkhole-related “structural damage.” The law, however, did not actually define “structural damage,” perhaps because the common sense interpretation is that any damage to a structure amounts to structural damage. However, the lack of a definition has led many insurers to categorize serious sinkhole damage, such as cracks in floors, steps and walls, as aesthetic rather than structural.

In 2011, lawmakers recognized this problem and they provided a definition of “structural damage,” but the insurance disputes did not end there.

Last month, in two separate Florida sinkhole insurance disputes, federal judges ruled that “structural damage” is not as simple as damage to a home or structure. Instead, they said that insurers only need to cover damage that affects a building’s structural integrity.

While those two rulings seem to limit the definition of “structural damage” in the favor of insurance companies, it is important to note that the majority of courts to weigh in on this issue have held that any damage to a structure is structural damage.

However, these recent rulings might unfortunately give insurance companies a newfound motivation to further limit coverage of sinkhole claims.

Recovering compensation from homeowner’s insurance companies for sinkhole damage is rarely easy. Florida homeowners should consider working with sinkhole claims attorneys in order to fight for the sinkhole insurance compensation that they deserve.

Source: Claims Journal, “Sinkhole ‘Structural Damage’ Definition Sliding in Insurer’s Favor,” Wesley Todd, Oct. 8, 2013