FPCA Homeowners Division – Sinkhole Data Update

FPCA Homeowners Division Members:

At our last meeting, the membership unanimously approved a motion to collect certain data regarding sinkhole activity and submit it to a third party for compilation and later submission to the Florida Senate Banking and Insurance Committee staff as a reference for their pending interim study on sinkholes.  Since that time, the Florida Office of Insurance Regulation (FLOIR) has released its own data call for the same purpose.  As a result, many FPCA Homeowners Division Members have expressed concern that production of the information requested in the FPCA project is redundant and overly burdensome.  Based on this feedback, we recommend that the FPCA cancel its project and instead focus on the FLOIR data call.  If any Members have an objection to this cancelation, please let me know by Wednesday, September 8, 2010, and we will schedule a formal vote.

Additionally, I would like to take this opportunity to request suggestions for your company’s “Top 5 Legislative Suggestions to Sinkhole.”  Currently, we are working with other legislative consultants to put together a sinkhole proposal for the next legislative session.  At this point, we have only discussed some variations of last year’s sinkhole proposal but we are not confined to working within that proposal.  I would appreciate the thoughts and suggestions of the FPCA Members on additions, deletions and alternate proposals.  As you submit your suggestions, please submit a short, corresponding explanation as well. 

Attached is last year’s proposal with preliminary edits.  Members should keep in mind that last year’s proposal was partially negotiated with the trial bar, although no agreement was ever reached with them.  Please rank your suggestions 1-5 with 1 being the most important and 5 being the least important.  We will discuss these proposals on our next Homeowners Division conference call.

Some FPCA Members recently have made recommendations, including the following:

1.  Public Adjusters:  prohibit public adjusters from collecting commissions on land stabilization under the rationale that a public adjuster does not lend any expertise in that area;

2.  Public Adjusters:  ban in-person and telephone solicitation by public adjusters;

3.  Cap sinkhole losses to 25% of Coverage A;

4.  Require dwelling to be “unlivable” to collect for sinkhole stabilization, or remove sinkhole coverage and require only catastrophic ground cover collapse;

5.  Define the standard for “structural damage;”

6. Redefine the term “sinkhole” by stating that “sinkhole” coverage is coverage for catastrophic ground collapse, and that coverage for cosmetic defects from settling or minor ground shifting is covered under a different provision.  Clarify how cracking or settling from construction defects should be handled;

7.  Revamp the appraisal process for disputed property insurance claims; and

8.  Prohibit new claims filing from 2 years from the date of loss.

Please direct all comments, suggestions, and inquiries to Katie Webb (kwebb@cftlaw.com).