The law governing how sinkhole-related insurance claims are handled in Florida was significantly altered in 2011. Under the laws passed at that time, insurers who were presented with a claim for sinkhole-related damage would assess the property to determine if there appeared to be structural damage to the residence consistent with sinkhole activity. If the insurer found structural damage that could be linked to sinkhole activity, or if the insurer cannot determine a cause for the damage, a professional engineer and/or geologist must prepare a report indicating whether the structural damage is in fact caused by sinkhole activity. The Neutral Evaluation Program would then come into play if, following the receipt of a report from an engineer or geologist, the insurer denies the claim.
Sinkhole Damage and the Neutral Evaluation Program
If the insurer denies a sinkhole damage claim based on the report of its engineer or geologist, the insured has an opportunity to participate in the State of Florida’s Neutral Evaluation Program. This program is designed to reduce the amount of sinkhole-related litigation by giving both the insured and the insurer an opinion from a third party geologist or engineer who is familiar with alternative dispute resolution methods. These professionals are supposed to be “fair and impartial” in conducting their evaluations. At the conclusion of their evaluations, the engineer/geologist will present a report of his or her findings to both parties. The parties are then free to attempt to reach a settlement or pursue other available legal remedies.
Changes to the Neutral Evaluation Program
Recent changes that became effective July 27, 2015 have changed some aspects of the Neutral Evaluation Program while leaving many of its features intact. Under the new rules:
- The neutral evaluator standards previously contained in administrative regulations and rules have been repealed as these same standards are now contained in Florida law;
- Insurers now have five business days to contact insured individuals who have requested a neutral evaluation;
- Neutral evaluators have three business days after the process has begun to disclose any conflicts of interest they may have (for example, a neutral evaluator would have to disclose to both parties the fact that he or she previously worked for the insurer or is related to the insured);
- Insurance companies are now permitted to contact both the policyholder and the policyholder’s representative regarding the neutral evaluation process; and
- The date the Neutral Evaluation Process begins is now defined as the date the insurer receives notification from the Department of Financial Services that a request for a neutral evaluation has been received as opposed to the date the Department of Financial Services receives notification that a dispute exists between the insurer and insured.
What Effect Do These Changes Have for Homeowners?
These changes will have little effect on the way neutral evaluations are conducted other than the fact that potential neutral evaluators must now disclose any conflicts of interest they may have in any given case. Homeowners should, of course, object to using any “neutral” evaluator that discloses a conflict of interest. While the Neutral Evaluation Program does not result in any findings that are binding on the parties, at least one recent court case determined that “good faith” participation in the program may be a prerequisite to recovering attorney’s fees and costs from a subsequent lawsuit.
Our Florida homeowner’s insurance claim law firm can provide legal counsel and guidance to homeowners struggling with their insurers to obtain payment for a valid claim. The Law Firm J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.