Florida Sinkhole Laws and Your Rights

SINKHOLE FACTS AND INFORMATION:
Presented by:
FLORIDA PUBLIC ADJUSTING
“Your Premier Sinkhole Public Adjusters”
NEW CLAIM, DENIAL OR REPAIR FAILURE, WE CAN ALMOST ALWAYS HELP.
31 YEARS OF FULL TIME EXPERIENCE
Phone: 863-701-9799 E-Mail: FPA@FloridaPA.net

TAMPA***SPRING HILL***LAKELAND***BROOKSVILLE

Serving Florida Consumers Statewide
Proud members of the Florida Association of Public Insurance
Adjusters and the Florida Windstorm Conference

Florida’s Premier Sinkhole Public Adjusters

“Making the odds even”

CONSUMER PROTECTION LAWS AND YOUR RIGHTS:

Florida, unlike some states, has very strong consumer laws. They require insurance companies to deal in good faith and to diligently investigate any reported claim of possible sinkhole activity. That, of course, does not always happen in the real world. Hundreds of consumers have had sinkhole claims wrongly denied.

Attorney Fees: Florida has fairly good consumer statutes that allow for the collection of attorney fees if a consumer must retain an attorney to collect an insurance claim. Those fees are not automatic. Certain specific requirements are necessary in order for attorney fees to be awarded. New case law makes it essential that your claim is properly documented and presented, which we are experts in doing. Should an attorney be necessary, the work product we prepare will be invaluable in the hands of your attorney. It will greatly increase your chances to recover attorney fees, not to mention a larger settlement due to our experience and documentation.

Bad Faith: Florida Law also allows for the possibility of being awarded damages for bad faith, providing a proper Civil Remedy Notice is filed. Without a proper Civil Remedy Notice, you will be prevented by law from pursuing a case for bad faith. Bad faith damages are potentially obtainable for a violation of any of the following Statutes and Administrative Rules. However, specific information must be properly submitted to the Department of Financial Services and to your insurance company. We know many attorneys who will prepare your Civil Remedy Notices at no cost to you in order that your rights are protected. They do this as a consumer public service. Upon acceptance of a proper Civil Remedy Notice, the insurance company has 60 days to settle your claim before you become eligible for potential damages. Reviewing your situation regarding this is one of our duties as a licensed public adjuster. We tell adjusters to pay our clients nice or pay them twice. We strongly recommend that you have an attorney who specializes in first party property claims to prepare and file your Civil Remedy Notice. But if you wish to do it yourself, we will provide you with the form required by the Department of Financial Services.

F.S. §624.155(1)(a)1- Any person may bring a civil action against an insurer when such person is damaged: (a) by violation of any of the following provisions by the insurer: (1) Section 626.9541(1)(i), (o), or (x)

F.S. §624.155(b)1 – Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward the insured and with due regard for her or his interests.

F.S. §624.155(b)2 – Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made.

F.S. §624.155(b)3 – Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.

F.S. §626.9541(1)(i)1 – Attempting to settle claims on the basis of an application, when serving as a binder or intended to become a part of the policy, or any other material document which was altered without notice to, or knowledge or consent of, the insured.

F.S. §626.9541(1)(i)2 – A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy.

F.S. §626.9541(1)(i)3a – Failing to adopt and implement standards for the proper investigation of claims.

F.S. §626.9541(1)(i)3b – Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.

F.S. §626.9541(1)(i)3c – Failing to acknowledge and act promptly upon communications with respect to claims.

F.S. §626.9541(1)(i)3d – Denying claims without conducting reasonable investigations based upon available information.

F.S. §626.9531(1)(i)3e – Failing to affirm or deny full or partial coverage of claims, and, as to partial coverage, the dollar amount or extent of coverage, or failing to provide a written statement that the claim is being investigated, upon the written request of the insured within 30 days after proof-of-loss statements have been completed.

F.S. §626.9541(1)(i)3f – Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.

F.S. §626.9541(1)(i)3g – Failing to promptly notify the insured of any additional information necessary for the processing of a claim.

F.S. §626.9541(1)(i)3h – Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.

F.S. §626.9541(1)(i)(4) –Failing to pay undisputed amounts of partial or full benefits owed under first-party property insurance policies within 90 days after an insurer receives notice of a residential property insurance claim, determines the amounts of partial or full benefits, and agrees to coverage, unless payment of the undisputed benefits is prevented by an act of God, prevented by the impossibility of performance, or due to actions by the insured or claimant that constitute fraud, lack of cooperation, or intentional misrepresentation regarding the claim for which benefits are owed.

F.S. §626.878 – An adjuster shall subscribe to the code of ethics specified in the rules of the Department (formerly the Department of Insurance).

F.S. §626.877 – Every adjuster shall adjust or investigate every claim, damage, or loss made or occurring under an insurance contract, in accordance with the terms and conditions of the contract and of the applicable laws of this state.

69B-220.201 Ethical Requirements:

(1) Definitions. The following definitions shall apply for purposes of this rule:

(a) “Adjuster,” when used without further specification, includes all types and classes of insurance adjusters, (company, independent, and public), subject to Chapter 626, Florida Statutes, regardless of whether resident or nonresident, and whether permanent, temporary, or emergency licensees.

(b) “Client” includes both clients and potential clients; and means any person who consults with or hires an adjuster to provide adjusting services.

(d) “Person” includes natural persons and legal entities.

(2) Violation.

(a) Violation of any provision of this rule shall constitute grounds for administrative action against the licensee.

(b) A breach of any provision of this rule constitutes an unfair claims settlement practice.

(3) Code of Ethics. The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance. The following are standards of conduct that define ethical behavior, and shall constitute a code of ethics that shall be binding on all adjusters:

(a) An adjuster shall: not directly or indirectly refer or steer any claimant needing repairs or other services in connection with a loss to any person with whom the adjuster has an undisclosed financial interest, or who will or is reasonably anticipated to provide the adjuster any direct or indirect compensation for the referral or for any resulting business.

(b) An adjuster shall treat all claimants equally.

1. An adjuster shall not provide favored treatment to any claimant.

2. An adjuster shall adjust all claims strictly in accordance with the insurance contract.

(d) An adjuster shall make truthful and unbiased reports of the facts after making a complete investigation.

(e) An adjuster shall handle every adjustment and settlement with honesty and integrity, and allow a fair adjustment or settlement to all parties without any remuneration to himself except that to which he is legally entitled.

(f) An adjuster, upon undertaking the handling of a claim, shall act with dispatch and due diligence in achieving a proper disposition of the claim.

(g) An adjuster shall promptly report to the Department any conduct by any licensed insurance representative of this state which violates any provision of the Insurance Code or Department rule or order.

(h) An adjuster shall exercise extraordinary care when dealing with elderly clients to assure that they are not disadvantaged in their claims transactions by failing memory or impaired cognitive processes.

(i) An adjuster shall not negotiate or effect settlement directly or indirectly with any third-party claimant represented by an attorney, if the adjuster has knowledge of such representation, except with the consent of the attorney. For purposes of this subsection, the term “third-party claimant” does not include the insured or the insured’s resident relatives.

(j) An adjuster is permitted to interview any witness, or prospective witness, without the consent of opposing counsel or party. In doing so, however, the adjuster shall scrupulously avoid any suggestion calculated to induce a witness to suppress or deviate from the truth, or in any degree affect the witness’s appearance or testimony during deposition or at the trial. If any witness making or giving a signed or recorded statement so requests, the witness shall be given a copy of the statement.

(k) An adjuster shall not advise a claimant to refrain from seeking legal advice, nor advise against the retention of counsel to protect the claimant’s interest.

(l) An adjuster shall not attempt to negotiate with or obtain any statement from a claimant or witness at a time that the claimant or witness is, or would reasonably be expected to be, in shock or serious mental or emotional distress as a result of physical, mental, or emotional trauma associated with a loss. The adjuster shall not conclude a settlement when the settlement would be disadvantageous to, or to the detriment of, a claimant who is in the traumatic or distressed state described above.

(m) An adjuster shall not knowingly fail to advise a claimant of the claimant’s claim rights in accordance with the terms and conditions of the contract and of the applicable laws of this state. An adjuster shall exercise care not to engage in the unlicensed practice of law as prescribed by the Florida Bar.

(n) A company or independent adjuster shall not draft special releases called for by the unusual circumstances of any settlement or otherwise draft any form of release, unless advance written approval by the insurer can be demonstrated to the Department. Except as provided above, a company or independent adjuster is permitted only to fill in the blanks in a release form approved by the insurer they represent.

(o) An adjuster shall not undertake the adjustment of any claim concerning which the adjuster is not currently competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the adjuster’s current expertise.

(p) No person shall, as a public adjuster, represent any person or entity whose claim the adjuster has previously adjusted while acting as an adjuster representing any insurer or independent adjusting firm. No person shall, as a company or independent adjuster, represent him- or herself or any insurer or independent adjusting firm against any person or entity that the adjuster previously represented as a public adjuster.

(q) A public adjuster shall not represent or imply to any client or potential client that insurers, company adjusters, or independent adjusters routinely attempt to, or do in fact, deprive claimants of their full rights under an insurance policy. No insurer, independent adjuster, or company adjuster shall represent or imply to any claimant that public adjusters are unscrupulous, or that engaging a public adjuster will delay or have other adverse effect upon the settlement of a claim.

(r) No public adjuster, while so licensed in the Department’s records, may represent or act as a company adjuster, independent adjuster, or general lines agent.

(s) A company adjuster, independent adjuster, attorney, investigator, or other person acting on behalf of an insurer that needs access to an insured or claimant or to the insured property that is the subject of a claim shall provide at least 48 hours notice to the insured or claimant prior to scheduling a meeting with the claimant or an on-site inspection of the insured property. The insured or claimant may deny access to the property if this notice has not been provided.

(4) Public Adjusters, Other Ethical Constraints. In addition to considerations set out above for adjusters, the following ethical considerations are specific to public adjusters and shall be binding upon public adjusters:

(a) A public adjuster shall advise the insured and claimant in advance of the insured or claimant’s right of counsel, and choice thereof, to represent the insured or claimant, and that such choice is to be made solely by the insured or claimant.

(b) The public adjuster shall notify the insured or claimant in advance of the name and location of any proposed contractor, architect, engineer, or similar professional, before any bid or proposal by any of these persons may be used by the public adjuster in estimating the loss or negotiating settlement. The insured or claimant may exercise veto power of any of these persons, in which case that person shall not be used in estimating costs.

(c) The public adjuster shall ensure that if a contractor, architect, engineer, or other professional is used in formulating estimates or otherwise participates in the adjustment of the claim, the professional shall be licensed by the Florida Department of Business and Professional Regulation.

(d) A public adjuster shall not prevent, or attempt to dissuade or prevent, a claimant from speaking privately with the insurer, company or independent adjuster, attorney, or any other person, regarding the settlement of the claim.

(e) A public adjuster shall not acquire any interest in salvaged property, except with the written consent and permission of the insured.

(f) A public adjuster shall not accept referrals of business from any person with whom the public adjuster may conduct business where there is any form or manner of agreement to compensate the person, whether directly or indirectly, for referring business to the public adjuster. Except as between licensed public adjusters, no public adjuster shall compensate any person, whether directly or indirectly, for the principal purpose of referring business to the public adjuster.

(g) A public adjuster’s contract with a client shall be revocable or cancellable by the insured or claimant, without penalty or obligation, for at least 3 business days after the contract is executed. The public adjuster shall disclose to the insured that the insured has the right to cancel with prompt notice within the revocation period. If the insured elects to cancel the contract, prompt notice shall be provided to the adjuster. Nothing in the provision shall be construed to prevent an insured from pursuing any civil remedy after the 3-day cancellation period.

(h) A public adjuster shall not enter into a contract or accept a power of attorney which vests in the public adjuster the effective authority to choose the persons who shall perform repair work.

(i) A public adjuster shall ensure that all contracts for the public adjuster’s services are in writing and set forth all terms and conditions of the engagement, including the terms required by subsection 69B-220.051(6), F.A.C.

(j) A public adjuster shall not restrict or prevent an insurer, company adjuster, independent adjuster, attorney, investigator, or other person acting on behalf of the insurer from having reasonable access at reasonable times to an insured or claimant or to the insured property that is the subject of a claim.

(5) Public Adjusters, Ethical Constraints During State of Emergency. In addition to considerations set forth above, the following ethical considerations shall apply to public adjusters in the event that the Governor of the State of Florida issues an Executive Order, by virtue of the authority vested in Article IV, Section 1(a) of the Florida Constitution and by the Florida Emergency Management Act, as amended, and all other applicable laws, declaring that a state of emergency exists in the State of Florida:

(a) No public adjuster shall require, demand, charge or accept any fee, retainer, compensation, commission, deposit, or other thing of value, prior to receipt by the insured or claimant of a payment on the claim by the insurer.

(b) As to any one insured or claimant, no public adjuster shall charge, agree to, or accept as compensation or reimbursement any payment, commission, fee, or other thing of value equal to more than ten percent of the amount of any insurance settlement or claim payment.

(c) No public adjuster shall enter into any contract, agreement or other arrangement with any person, including an attorney, building contractor, architect, appraiser or repairman, by which the person would enter into an agreement to assist a claimant or insured on an insurance claim, utilize the services of the adjuster to carry out the agreement and pay the adjuster an amount that would exceed the limitation of the adjuster’s compensation or reimbursement as provided in paragraph (b) above.

(d) This subsection applies to all claims that arise out of the events that created the State of Emergency, whether or not the adjusting contract was entered into while the State of Emergency was in effect and whether or not a claim is settled while the State of Emergency is in effect.

Specific Authority 624.308, 626.878, 626.9611 FS. Law Implemented 624.307(1), 626.611, 626.621, 626.865(2), 626.878, 626.9541(1)(i) FS. History–New 6-2-93, Amended 12-18-01, Formerly 4-220.201, Amended 3-27-05, 9-3-06.

CONCLUSION:

Obviously, many individuals and companies make a lot of money investigating sinkholes. The undeniable reality is that those who are regularly employed by insurance companies will, when all are combined collectively, find fewer sinkholes than those who are not regularly hired by the industry. There have been many hundreds of insurance companies’ obtained reports that have been provided to property owners with an inaccurate conclusion and hundreds of other reports that gave improper repair solutions. Sometimes it is a matter of the testing engineer or geologist lacking experience in sinkhole activity; sometimes it is a problem with the method of testing utilized at a particular location; sometimes it is a matter of an honest misinterpretation or an opinion based on incomplete or flawed data; sometimes it is the use of inexpensive and substandard testing methods, which are not thorough enough; and sometimes it is a matter of bias or outright intent. Several years ago, one licensed engineer assisted his insurance company client in denying a claim by certifying a report that concluded major and obvious sinkhole damage was caused not by a sinkhole but by the owner’s pet dog that dug a two-foot deep hole five feet from the perimeter of the building. He is still out there writing reports for his insurance company’s clients.