FLORIDA GEOLOGICAL SURVEY


term sudden is not defined or generally applicable, as a result it has been defined as needed,
causing constantly changing interpretations of the word. "Sudden" should either be deleted or
replaced by "sudden and/or sustained." The term "naturally occurring" is proposed to modify
subterranean voids, to clarify the legislative intent to deal with sinkhole loss caused from
continuing geologic processes that occur throughout Florida. It is intended to eliminate the
heretofore included categories of collapse from anthropogenic causes such as but not limited to;
subsurface construction debris compaction, water line or sewer line collapse or leaks, tree stumps
decay, past mining activities, or poorly designed wells.

 627.707 Minimum standards for investigation of sinkhole claims by insurers;
 nonrenewals.--

 (1) Upon receipt of a claim for a sinkhole loss, an insurer must meet the following
 minimum standards in investigating a claim:

 (a) Upon receipt of a claim for a sinkhole loss, the insurer must make an inspection of
 the insured's premises to determine if there has been physical damage to the structure
 which may constitute a sinkhole loss might be the result .f sinkhole active

 (b) If, upon the investigation pursuant to paragraph (a), the insurer discovers damage
 to a structure which is consistent with a sinkhole loss activity or if the structure is
 located in close proximity to a structure in which sinkhole damage has been verified,
 then prior to denying a claim, the insurer must obtain a written certification from an
 individual qualified to determine the existence of a sinkhole loss activity, stating that
 the cause of the claim is not a sinkhole loss activity, and that the analysis conducted
 was of sufficient scope to eliminate a sinkhole activity as the cause of damage within a
 reasonable professional probability. The written certification must also specify the
 professional discipline and professional licensure or registration under which the
 analysis was conducted.

 (c) If the insurer obtains, pursuant to paragraph (b), written certification that the
 cause of the claim was not a sinkhole ativity, and if the policyholder has submitted the
 sinkhole claim without good faith grounds for submitting such claim, the policyholder
 shall reimburse the insurer for 50 percent of the cost of the analysis under paragraph
 (b); however, a policyholder is not required to reimburse an insurer more than $2,500
 with respect to any claim. A policyholder is required to pay reimbursement under this
 paragraph only if the insurer, prior to ordering the analysis under paragraph (b),
 informs the policyholder of the policyholder's potential liability for reimbursement and
 gives the policyholder the opportunity to withdraw the claim.

 (2) No insurer shall nonrenew 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.

 History.--s. 1, ch. 92-146; s. 4, ch. 93-401.

 These proposed modifications reflect the need to clarify a loss due to a sinkhole. Sinkholes
are features that intersect the land surface, potentially impacting structures located and built on