The Florida House passed HB 129, commonly referred to as the “Citizens Sinkhole Repair Bill,” by a vote of 85-25 on Friday, April 11, 2014. This bill contains several changes concerning Florida’s sinkhole law, but only for claims submitted to Citizens. The most controversial piece of the legislation is the “Citizens Sinkhole Repair Program,” which will require policyholders of Citizens Property Insurance to choose from contractors approved by Citizens to repair homes that have been damaged by sinkholes.
The repair program was criticized by some Democrats as restricting the homeowners’ ability to find a contractor and repair their home on the free market. As Rep. Amanda Murphy of New Port Richey states, the ability to choose who repairs one’s home should not be limited by the government. Our Miami Homeowners’ Insurance lawyers find that though the bill requires that the pool of contractors be “competitive and inclusive,” a pool of only 12 contractors will satisfy this requirement.
Representative Jake Raburn, a Republican from Lithia, sponsored the recently passed house bill and points to Citizens’ abysmal sinkhole loss ratio in the past few years. In four years, Citizens took far less in premiums than it paid out. He further touted the amount of choice the measure will afford customers. Currently, 16 companies qualify for the program. Further, all repairs include a five year warranty, which is something not generally seen in the private market.
HB 129 would also affect sinkhole claims litigated in court. All repairs must be completed within a reasonable period of time once the court order has verified the loss due to the sinkhole and adjudicated necessary repairs. Once repairs are completed, the policyholder has just 45 days to notify Citizens of any dissatisfaction concerning the effectiveness of the repairs.
Additionally, sinkhole repairs under the proposed legislation are not an election to repair. Thus, if Citizens chooses to repair the sinkhole damage, then the insurance policy does not change to a repair contract, i.e. one without policy limits. As we stand today, anytime an insurance company exercises its right to repair, such election constitutes a new contract with no policy limits -an maximum amount set by the policy that the insurance company will pay as a result of a loss. For instance, we are currently representing an Insured that sustained a water loss to her kitchen cabinets when a pipe underneath her kitchen sink broke. The insurance company chose to exercise its right to repair and sent a contractor to the Insured’s property to replace the damaged kitchen cabinets.
The insurance company’s election to pay a contractor to make the repairs constitutes a new contract -to put the property back into the position it was prior to the loss. In the process of replacing the kitchen cabinet, the contractor broke a few floor tiles and improperly installed the kitchen cabinets. As a result of the contractor’s wrongdoing, the insurance company breached its contract to repair with the Insured. Therefore, the insurance is now liable for the replacement of the tile floors and the kitchen cabinet, notwithstanding the amount the replacement will cost.
Nevertheless, if Citizens determines that the cost to repair the property exceeds the policy’s limits after the repairs have begun, Citizens can elect to pay out the policy limits. If policy limits are paid, the repair work will stop.
This controversial piece of legislation still has a long road ahead to becoming law. Now that it has passed the House, it must pass the Florida Senate before being sent to Governor Scott for his signature. Citizen policyholders with sinkhole damage are advised to consult with an attorney as soon as possible as this bill winds its way through the legislature.
Greenberg Stone and Urbano: Miami Homeowners Insurance Superlawyers
A home is one of the most expensive purchases that a person can make. In addition to the fact that insurance is a required component of obtaining and keeping a home mortgage, it also is the safety net for any repairs or rebuilds that might be necessary after a devastating event. When a claim is denied, a homeowner may feel that he has nowhere to turn, but the skilled homeowners’ insurance attorneys at Greenberg Stone and Urbano have more than 120 years of combined experience in getting justice for homeowners. Our dedication to our clients has led to an “AV” rating from Martindale Hubbell, and it is why we have been asked to join Primerus, an international society of leading law firms. Moreover, the Miami Herald voted us as one of the top-rated South Florida law firm, and, we have earned the title of “Superlawyers,” designating us as being among the best lawyers in America. We want to put this dedication to work for you, so call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule an initial consultation.