SINKHOLE
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.
69O-220.201(4) – The work of adjusting insurance claims engages the public
trust. An adjuster must put the duty for fair and honest treatment of the
claimant above the adjuster’s own interest, in every instance.
69O-220.201(4)(a) – An adjuster shall disclose all financial interest in any
direct or indirect aspect of an adjusting transaction.
69O-220.201(4)(b) – An adjuster shall treat all claimants equally. An adjuster
shall not provide favored treatment to any claimant. An adjuster shall adjust
all claims strictly in accordance with the insurance contract.
69O-220.201(4)(c) – An adjuster shall never approach investigations,
adjustments, and settlements in a manner prejudicial to the insured.
69O-220.201(4)(d) – An adjuster shall make truthful and unbiased reports of the
facts after making a complete investigation.
69O-220.201(4)(e) – An adjuster shall handle very 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.
69O-220.201(4)(f) – An adjuster, upon undertaking the handling of a claim, shall
act with dispatch and due diligence in achieving a proper disposition thereof.
69O-220.201(4)(g) – An adjuster shall promptly report to the Office any conduct
by any licensed insurance representative of this state, which conduct violates
any insurance law or Office rule or order.
69O220.201(4)(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.
69O-220.201(4)(i) – An adjuster shall not negotiate or effect settlement
directly or indirectly with any third party claimant represented by an attorney,
if said 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.
69O-220.201(4)(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
their appearance or testimony at the trial or on the witness stand. If any
witness making or giving a signed or recorded statement so requests, the witness
shall be given a copy thereof.
69O-220.201(4)(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.
69O-220.201(4)(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. Further, the adjuster shall not conclude a settlement
when such settlement would be disadvantageous or to the detriment of a claimant
who is in the traumatic or distressed state described above.
69O-220.201(4)(m) – An adjuster shall not knowingly fail to advise a claimant of
their 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.
69O-220.201(4)(n) – A company or independent adjuster shall not draft, unless
approved in writing in advance by the insurer and such written communication can
be demonstrated to the Office, special releases called for by the unusual
circumstances of any settlement or otherwise draft any form of release. Except
as provided above, a company or independent adjuster is only permitted to fill
in the blanks of a release form approved by the insurer they represent.
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.
Completeness of claim file: Does your claim file contain sufficient information
to permit reconstruction of the insurer’s activities relative to the above
claim, and does it document compliance or noncompliance with the above statutes
and administrative rules? Do not lose your rights because of the improper
documentation of your claim file.
No insurer shall non-renew any policy of property
insurance on the basis of filing of claims for partial loss caused by sinkhole
damage or clay shrinkage as long as the total of such payments does not exceed
the current policy limits of coverage for property damage, and provided the
insured has repaired the structure in accordance with the engineering
recommendations upon which any payment or policy proceeds were based.
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 much less sinkhole activity than those who are not
regularly hired by the industry. There have been 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.
