FPCA Homeowners Division: Input Regarding ‘Functional Damage’ Sinkhole Coverage Needed by 2pm Today

Mar 14, 2011

FPCA Homeowners Division Members:

Senator Richter, Chair of the Senate Banking & Insurance Committee, has requested that an amendment to SB 408 be prepared by 2:00 p.m. today, to provide for “functional damage” sinkhole coverage.  The amendment also should include all necessary components related to such coverage. 

Please provide your comments before 2:00 p.m. today to Katie Webb (kwebb@cftlaw.com).

For your consideration, it has been proposed that if insurers are required to offer sinkhole coverage, then the following should apply:

  • All bad faith on sinkhole claims should be eliminated
  • It should be illegal for public adjusters and attorneys to be involved in a sinkhole claim in any manner
  • Insurers should be allowed to “cap” coverage at $20,000.  The ability to offer more coverage should be optional.
  • It should be incumbent on policyholders to prove existence of a sinkhole, as well as to pay for the engineer report.
  • Under no circumstance should insurers be obligated to go beyond the stated limit of $20,000 or coverage they choose to offer above that amount.
  • Insurers should be allowed to charge for “land,” since that is what they are covering.
  • The Florida Office of Insurance Regulation should not be relied upon to promulgate rates for “land” coverage, but rather state that it is 100 percent of the rate that applies to the dwelling coverage.