Here we will walk through the typical sinkhole loss and repair process, attempting to note potential traps for the unwary. Some of these items may change as the Florida legislature continues to update sinkhole related laws, thus you should always consult an attorney to be sure you have the most up to date information.
The first part involves notification to the insurance company. The insurance company, if the policy includes sinkhole loss coverage, is required to inspect the property to find out whether a sinkhole caused structural damage. Keep in mind that there’s been all kinds of wrangling over the phrase “Sinkhole caused structural damage.” Structural damage is defined in the building and housing codes and has changed in meaning over time, becoming somewhat more restrictive now than in the past. Remember that the powerful insurance lobby uses its influence to try and get favorable laws written.
The insurance company generally sends an “Expert” to examine your property for sinkhole damage. This is a very important preliminary step. This expert has to have certain qualifications and will most likely be a geologist or engineer. If the insurance company denies your claim based on their expert’s report that there is no sinkhole caused structural damage, your only recourse is to get a second opinion. An attorney specializing in sinkhole related loss generally has a staff of their own experts that they can employ.
Now the insurance company has a certain obligation to put you back in the same place you were before the sinkhole loss occurred. However, a lot of times the insurance company will cut corners, especially if you don’t have a knowledgeable advocate on your side. One of the common traps is can be thought of as the great “Grouting estimate scam.”
In the Grouting estimate scam, the company will solicit several bids for estimates of the repair work. Invariably, one of them will be for “Grouting.” Grouting is a procedure where the sinkhole is filled with concrete, providing it with structural integrity and preventing further soil collapse into the weak spot. Grouting may be done as a preventative measure or as in this case, as a repair measure. There is nothing inherently wrong with grouting as a procedure, and it may work fine in some cases.
The heart of the scam relies in the fact that it is almost impossible to predict how much concrete will be necessary to fill the sinkhole. The estimates will always include language along the lines of “Homeowner to be responsible for costs of concrete exceeding this estimate.” In fact, the low bid will almost invariably be a low estimate. The insurance company, experienced in these matters, will select the lowest grouting bid. It will then offer you the cost of the estimate as “Settlement” of the insurance claim.
Settlement is one of those legal trap words that you should generally be very careful of agreeing to under any circumstances. Remember, the insurance company is on the hook to you to fully repair your house and fix sinkhole damage. “Settlement” in this context means that they are let off the hook (the insurance policy) once they pay the money. Thus, with all niceties removed, any insurance company running the great grouting scam is trying to screw you with a settlement it knows won’t be enough and wash its hands.
There are other problems with only using grouting as a fix. The process can involve drilling deep holes into ground that is already unstable, which can actually worsen sinkhole damage. Remember, your goal is to return your property back to a state close to how it was originally. The insurance company’s goal is to settle your claim for as little as possible, and if that includes band-aid fixes, so be it. In many situations, the insurance company’s engineer will suggest that grouting is the only repair needed.
However, many, many times a neutral engineer, or one retained by your attorney will disagree and say that underpinning is required. Underpinning involves structurally supporting the foundation of the house with metal structures that resemble piers. These piers pass through the weaklimestone layer and extend deep, all the way down to solidbedrock. This prevents any further shifting or sinking, and is particularly useful as a preventative measure in preserving the building’s foundation. Underpinning can be used with or without grouting. Oddly, underpinning may not be more expensive than grouting, however there’s less leeway for an insurance company to run a scam. However, there is a long list of valid technical reasons why underpinning may not work in all situations, adding to the list of technical headaches you might have to deal with.
Some of the worst insurance companies will simply give you the runaround, for years if necessary, rather than address the disagreement between engineers. Remember that insurance companies have all the time in the world. The longer they delay, the more likely the policyholder is to give in, pass away, or have the laws changed on them in favor of the insurance company. Again, sadly, it takes a good lawyer making threats to make some of these companies take notice of your claim. It is always better to be a squeaky wheel when it comes to dealing with insurance companies.