Florida’s Citizens Property Insurance Sinkhole Claims Settlement Offer Letter Draws Praise, Critics

Dec 12, 2013


In a news release issued today, December 12, 2013, Citizens Property Insurance Corporation’s (“Citizens”) Chairman Chris Gardner noted the State-run insurer’s efforts to settle pending sinkhole claims by providing incentives for homeowners to have recommended repair work completed quickly.

Citizens began sending letters this week to hundreds of its policyholders who are disputing repair recommendations surrounding their sinkhole claims.  Of the 2,100 disputed sinkhole claims, 1,329 deal with disagreements over repair methods.

The settlement offer comes after the Tampa Bay Times and Miami Hearld reported frustration among customers with the sinkhole claims process.

Citizens’ proposal encourages policyholders to have repair work completed on their claim in accordance with an original engineer’s recommendations and offers an alternative resolution process for cases in which engineering opinions differ. 

Florida Senator Wilton Simpson (R-Trilby) has been working with Citizens in an effort to settle many of the ongoing sinkhole claims that are currently being litigated.  During late November, he filed SB 416, which would establish Citizens’ Sinkhole Stabilization Repair Program.

“Citizens is now offering an alternative to the 1,329 people in litigation over the proper method of repair relating to sinkhole claims,” said Senator Simpson. ” . . . I received a sample letter and I feel that what’s being offered will allow for much needed repairs to happen quickly and put an end to costly litigation.  I would encourage each of my constituents to take a very close look at the proposal that’s being offered.”

But, as reported yesterday by Tampa Bay Times’ Michael Van Sickler, ” . . . frequent Citizens critic and former state lawmaker Mike Fasano, who is now the Pasco tax collector, said he was happy to hear that the company will require that the money be spent on repairs.

“But he questioned the chosen method of repair:  grouting.  He said grouting is more expensive than other methods, such as pinning.

“This will cost Citizens a fortune,” Fasano said. “Grouting is expensive.  Companies will pour cement just to meet the total cost of the claim.  They’ll grout until the cows come home in some cases.”

To read the complete Tampa Bay Times story that includes a redacted copy of Citizens’ “Grout in the Ground” proposal letter, click here.

As required by Florida law, Citizens now requires sinkhole repairs to be completed in accordance with a qualified engineer’s recommendation. Claim payments are made once a contractor has been employed and work has begun.

Under the proposed settlement agreement, homeowners disputing the original engineer’s recommended repair method can bring their recommendation to a neutral evaluator, who will review the repair options and render a decision.  Citizens will abide by the evaluator’s determination.

The proposal specifically explains that Citizens will reimburse policyholders for additional remediation work that may be needed after sinkhole repairs begin.  It also states that Citizens will cover any additional cosmetic repairs resulting from the remediation process.

Chairman Gardner said the proposal is a good faith effort to bring finality to sinkhole claims by ensuring that all necessary repairs are completed in accordance with the recommendations of a qualified engineer.

“We use the phrase ‘put grout in the ground’ to emphasize that we want the recommended repair work completed quickly and properly, and in accordance with professional recommendations,” Gardner said.  “We believe this proposal will help policyholders make their property safe for themselves, their family and their neighbors.”


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