Sinkholes have been in the news lately and Floridians are rightly concerned about both safety and ensuring their property is properly covered by insurance in case a sinkhole damages their home. Building off of our last post on sinkholes and the difficulties for homeowners and their insurance policies in Florida (see post here), our Florida property insurance lawyers saw another recent story about a case involving this very issue.
Florida's First District Court of Appeals, in a case called Florida Farm Bureau Casualty Insurance Company and Florida Farm Bureau General Insurance Company v. State of Florida, Office of Insurance Regulation, has upheld a decision by state regulators saying that property insurance companies must offer sinkhole loss coverage equal to the value of the dwelling coverage limit. The case began when Farm Bureau Insurance requested to amend its policies to limit sinkhole damage coverage to 25 percent of the overall coverage amount. Florida's Office of Insurance Regulation rejected this request. The Office cited section 627.706(1) of Florida Statutes, providing that insurers must "make available ... coverage for sinkhole losses on any structure ... to the extent provided in the form to which the coverage attaches". They interpreted that to mean that insurers must offer an equal amount for sinkhole losses as the dwelling coverage limit, and not any lesser amount as Farm Bureau wanted. So Farm Bureau, dissatisfied, brought the case to the courts.
The First District Court of Appeals, in a decision written by Judge Marstiller (the decision can be found here), found that the Office of Insurance Regulation's decision was not clearly erroneous and their decision was a permissible interpretation of the statute entitled to deference from the court. The DCA noted that when the relevant statutory provision is read as a whole, it ties deductibles to base policy coverage limits. Therefore, the Court found it is reasonable to interpret the statutory provision as intending that the amount of sinkhole loss coverage be equal to that coverage provided in the base insurance policy. In ruling thus, the Court noted that Florida property insurance companies have been required to provide catastrophic ground cover collapse coverage in addition to optional sinkhole insurance coverage since 2007 when it was included in the language of section 627.706, even before it was amended in 2011.
With so much tied up in the value of your home and the cost to insure it, make sure you stay on top of what your insurance policy covers and does not cover. And if you are having problems with your insurance company giving you the run around, contact a Florida insurance attorney to learn about your options as soon as possible. Under Florida law, if you proceed with a case and you succeed, the attorney's fees will automatically be the responsibility of the insurance company. Large claim or small claim, you would get to keep the court award and not have to worry about paying lawyer's fees just to get what you deserve under your insurance policy.