The 2023 Florida Statutes (including Special Session C)

Title XXXVII
INSURANCE

Chapter 627
INSURANCE RATES AND CONTRACTS

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F.S. 627.706

627.706 Sinkhole insurance; catastrophic ground cover collapse; definitions.—

(1)(a) Every insurer authorized to transact property insurance in this state must provide coverage for a catastrophic ground cover collapse.

(b) The insurer shall make available, for an appropriate additional premium, coverage for sinkhole losses on any structure, including the contents of personal property contained therein, to the extent provided in the form to which the coverage attaches. The insurer may require an inspection of the property before issuance of sinkhole loss coverage. A policy for residential property insurance may include a deductible amount applicable to sinkhole losses equal to 1 percent, 2 percent, 5 percent, or 10 percent of the policy dwelling limits, with appropriate premium discounts offered with each deductible amount.

(c) The insurer may restrict catastrophic ground cover collapse and sinkhole loss coverage to the principal building, as defined in the applicable policy.

(2) As used in ss. 627.706-627.7074, and as used in connection with any policy providing coverage for a catastrophic ground cover collapse or for sinkhole losses, the term:

(a) “Catastrophic ground cover collapse” means geological activity that results in all the following:

1. The abrupt collapse of the ground cover;

2. A depression in the ground cover clearly visible to the naked eye;

3. Structural damage to the covered building, including the foundation; and

4. The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

Contents coverage applies if there is a loss resulting from a catastrophic ground cover collapse. Damage consisting merely of the settling or cracking of a foundation, structure, or building does not constitute a loss resulting from a catastrophic ground cover collapse.

(b) “Neutral evaluation” means the alternative dispute resolution provided in s. 627.7074.

(c) “Neutral evaluator” means an engineer licensed under chapter 471 who has experience and expertise in the identification of sinkhole activity as well as other potential causes of structural damage or a professional geologist. The licensed engineer or professional geologist must have completed a course of study in alternative dispute resolution designed or approved by the department for use in the neutral evaluation process, must be determined by the department to be fair and impartial, and ¹may not otherwise be ineligible for certification as provided under s. 627.7074.

(d) “Primary structural member” means a structural element designed to provide support and stability for the vertical or lateral loads of the overall structure.

(e) “Primary structural system” means an assemblage of primary structural members.

(f) “Professional engineer” means a person, as defined in s. 471.005, who has a bachelor’s degree or higher in engineering. A professional engineer must also have experience and expertise in the identification of sinkhole activity or other potential causes of structural damage.

(g) “Professional geologist” means a person, as defined in s. 492.102, who has a bachelor’s degree or higher in geology or related earth science and experience and expertise in the identification of sinkhole activity as well as other potential geologic causes of structural damage.

(h) “Sinkhole” means a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole forms by collapse into subterranean voids created by dissolution of limestone or dolostone or by subsidence as these strata are dissolved.

(i) “Sinkhole activity” means settlement or systematic weakening of the earth supporting the covered building only if the settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on a limestone or similar rock formation.

(j) “Sinkhole loss” means structural damage to the covered building, including the foundation, caused by sinkhole activity. Contents coverage and additional living expenses apply only if there is structural damage to the covered building caused by sinkhole activity.

(k) “Structural damage” means a covered building, regardless of the date of its construction, has experienced the following:

1. Interior floor displacement or deflection in excess of acceptable variances as defined in ACI 117-90 or the Florida Building Code, which results in settlement-related damage to the interior such that the interior building structure or members become unfit for service or represents a safety hazard as defined within the Florida Building Code;

2. Foundation displacement or deflection in excess of acceptable variances as defined in ACI 318-95 or the Florida Building Code, which results in settlement-related damage to the primary structural members or primary structural systems that prevents those members or systems from supporting the loads and forces they were designed to support to the extent that stresses in those primary structural members or primary structural systems exceeds one and one-third the nominal strength allowed under the Florida Building Code for new buildings of similar structure, purpose, or location;

3. Damage that results in listing, leaning, or buckling of the exterior load-bearing walls or other vertical primary structural members to such an extent that a plumb line passing through the center of gravity does not fall inside the middle one-third of the base as defined within the Florida Building Code;

4. Damage that results in the building, or any portion of the building containing primary structural members or primary structural systems, being significantly likely to imminently collapse because of the movement or instability of the ground within the influence zone of the supporting ground within the sheer plane necessary for the purpose of supporting such building as defined within the Florida Building Code; or

5. Damage occurring on or after October 15, 2005, that qualifies as “substantial structural damage” as defined in the Florida Building Code.

(3) Insurers offering policies that exclude coverage for sinkhole losses must inform policyholders in bold type of not less than 14 points as follows: “YOUR POLICY PROVIDES COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN ADDITIONAL PREMIUM.”

(4) An insurer offering sinkhole coverage to policyholders before or after the adoption of s. 30, chapter 2007-1, Laws of Florida, may nonrenew the policies of policyholders maintaining sinkhole coverage at the option of the insurer, and provide an offer of coverage that includes catastrophic ground cover collapse and excludes sinkhole coverage. Insurers acting in accordance with this subsection are subject to the following requirements:

(a) Policyholders must be notified that a nonrenewal is for purposes of removing sinkhole coverage, and that the policyholder is being offered a policy that provides coverage for catastrophic ground cover collapse.

(b) Policyholders must be provided an actuarially reasonable premium credit or discount for the removal of sinkhole coverage and provision of only catastrophic ground cover collapse.

(c) Subject to the provisions of this subsection and the insurer’s approved underwriting or insurability guidelines, the insurer shall provide each policyholder with the opportunity to purchase an endorsement to his or her policy providing sinkhole coverage and may require an inspection of the property before issuance of a sinkhole coverage endorsement.

(d) Section 624.4305 does not apply to nonrenewal notices issued pursuant to this subsection.

(5) Any claim, including, but not limited to, initial, supplemental, and reopened claims under an insurance policy that provides sinkhole coverage is barred unless notice of the claim was given to the insurer in accordance with the terms of the policy within 2 years after the policyholder knew or reasonably should have known about the sinkhole loss.

History.—s. 2, ch. 81-280; s. 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 8, ch. 2000-333; s. 1189, ch. 2003-261; s. 17, ch. 2005-111; s. 25, ch. 2006-12; s. 30, ch. 2007-1; s. 1, ch. 2009-178; s. 3, ch. 2011-11; s. 22, ch. 2011-39; s. 6, ch. 2014-86; s. 29, ch. 2014-123.

¹Note.—As amended by s. 6, ch. 2014-86. The amendment by s. 29, ch. 2014-123, uses the word “must” instead of the word “may.”

F.S. 627.706 on Google Scholar

F.S. 627.706 on Casetext

Amendments to 627.706

Arrestable Offenses / Crimes under Fla. Stat. 627.706

Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 627.706.

Annotations, Discussions, Cases:

Cases from cite.case.law:

FLORIDA PENINSULA INSURANCE COMPANY, v. NEWLIN, 273 So. 3d 1172 (Fla. App. Ct. 2019)

. . . cracking in their house walls could be said to be the result of "sinkhole activity" as defined by section 627.706 . . .

OMEGA INSURANCE COMPANY, v. WALLACE, 224 So. 3d 864 (Fla. Dist. Ct. App. 2017)

. . . See § 627.706(2)(k), Fla. Stat. (2011); ch. 2011-39, § 22, at 570, Laws of Fla. . . .

DE LA FUENTE, v. FLORIDA INSURANCE GUARANTY ASSOCIATION,, 202 So. 3d 396 (Fla. 2016)

. . . . § 627.706(2)(j), Fla. Stat. (2011); § 627.706(2)(c), Fla. Stat. (2009). . . . .

JOHNSON, v. OMEGA INSURANCE COMPANY,, 200 So. 3d 1207 (Fla. 2016)

. . . . § 627.706(l)(b), Fla. Stat. (2015). . . . .” § 627.706(2)(h), Fla. Stat. . . . .” § 627.706(2)©, Fla. Stat. . . . . § 627.706(l)(b), Fla. Stat. . . .

TIMBER PINES PLAZA, LLC, v. KINSALE INSURANCE COMPANY,, 192 F. Supp. 3d 1287 (M.D. Fla. 2016)

. . . Since Zimmer references “sinkhole losses,” a term currently defined in Section 627.706 of the-Florida . . . Stat. § 627.706(l)(a) & (b) (2016). . . . Stat. § 627.706(2)(a)(l)-(3) (2016) (emphasis added). . . . Stat. § 627.706(i) (2016) (emphasis added). . . . (l)(a) than the “sinkhole loss” coverage referenced in Section 627.706(l)(b). . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. SALKEY, 190 So. 3d 1092 (Fla. Dist. Ct. App. 2016)

. . . These definitions are similar to, but not verbatim from, section 627.706(2), Florida Statutes (2008). . . .

SANCHEZ, v. TOWER HILL SIGNATURE INSURANCE,, 181 So. 3d 1211 (Fla. Dist. Ct. App. 2015)

. . . SDII concluded that a sinkhole loss, as defined by section 627.706, Florida Statutes (2009), had occurred . . .

HEGEL v. FIRST LIBERTY INSURANCE CORPORATION,, 778 F.3d 1214 (11th Cir. 2015)

. . . . § 627.706(2)(c) (2005). . . . Stats. § 627.706(3) (1981) (emphasis added). . . . And a May 17, 2011 amendment to Florida Statutes § 627.706 eventually provided a detailed, technical . . . Stats. § 627.706(2)(k) (2011). 2. . . . Hegels’ residence “DOES NOT MEET the criteria for Structural Damage as defined by Florida Statutes § 627.706 . . .

FLORIDA INSURANCE GUARANTY ASSOCIATION, v. DE LA FUENTE, 158 So. 3d 675 (Fla. Dist. Ct. App. 2015)

. . . definition of "sinkhole loss” in the policy is substantially identical to the definition found in section 627.706 . . .

FLORIDA PENINSULA INSURANCE COMPANY, v. CESPEDES,, 161 So. 3d 581 (Fla. Dist. Ct. App. 2014)

. . . Section 627.706(4), Florida Statutes (2008), required insurers offering policies that exclude coverage . . . Cespedes if Florida Peninsula failed to comply with section 627.706(4), Florida Statutes. . . .

MEJIA, v. CITIZENS PROPERTY INSURANCE CORP., 161 So. 3d 576 (Fla. Dist. Ct. App. 2014)

. . . .” § 627.706(1), Fla. Stat. (1981). . . . .” § 627.706(1), Fla. Stat. (2009) (emphasis added). . . . Compare § 627.706(1), Fla. Stat. (1981), with § 627.706(1), Fla. Stat. (2009). . . .

C. SHELTON, G. v. LIBERTY MUTUAL FIRE INSURANCE COMPANY,, 578 F. App'x 841 (11th Cir. 2014)

. . . . § 627.706 (1981). . . . Stat. § 627.706(2)(k) (2011) (emphasis added). . . . Stat. § 627.706(2)(k) (emphasis added). . . . There is no dispute here that the statutory definition of “structural damage” in § 627.706(2)(k) was . . . Stat. § 627.706(2)(k). . . . .

SEVILA v. FIRST LIBERTY INSURANCE CORPORATION,, 7 F. Supp. 3d 1226 (M.D. Fla. 2014)

. . . . § 627.706 (2011). . . . DISCUSSION From 1981, Florida Statute 627.706(1) required that insurers make coverage available for sinkhole . . . STAT. 627.706(j)-(k) (2011). . . . Stat. § 627.706 (2011) was sufficient. Id. . . . Furthermore, this district has held that the 2011 Amendment to Florida Statute 627.706 cannot be applied . . .

CITIZENS PROPERTY INSURANCE CORPORATION, a v. TRAPEO,, 136 So. 3d 670 (Fla. Dist. Ct. App. 2014)

. . . .” § 627.706(2)(b). . . . Trapeo filed a “Motion to Prevent the Retroactive Application of Florida Statutes 627.706 through 627.7074 . . .

GONZALEZ v. LIBERTY MUTUAL FIRE INSURANCE COMPANY,, 981 F. Supp. 2d 1219 (M.D. Fla. 2013)

. . . Both Section 627.706, Florida Statutes (2010), and the insurance policy, effective November 1, 2010, . . . As adopted in 1981, Section 627.706 defined (1) “loss” as “structural damage to the building” and (2) . . . Effective May 17, 2011, Section 627.706(2)(k)’s definition features terms employed by architects and . . . Section 627.706(2) announces that the statutory definition applies when “structural damage” is “used . . . Stat. § 627.706(2) ("As used in [Sections] 627.706-627.7074, and as used in connection with any policy . . .

REILLY v. LIBERTY MUTUAL FIRE INSURANCE COMPANY,, 966 F. Supp. 2d 1316 (M.D. Fla. 2013)

. . . . § 627.706 (1981). . . . Stat. § 627.706 provides: (j) “Sinkhole loss” means structural damage to the covered building, including . . . Stat. § 627.706(2)(k) (2011). . . .

FLORIDA FARM BUREAU CASUALTY INSURANCE COMPANY v. STATE OFFICE OF INSURANCE REGULATION,, 109 So. 3d 860 (Fla. Dist. Ct. App. 2013)

. . . Section 627.706(1), Florida Statutes (2011), requires Farm Bureau and other property insurers to provide . . . The Office concluded that section 627.706(1) requires insurers to offer sinkhole loss coverage in an . . . provide coverage for a catastrophic ground cover collapse.” § 627.706(l)(a), Fla. . . . The term “form” is not defined in either section 627.706 or elsewhere in the Insurance Code. . . . See § 627.706(1), Fla. Stat. (2007); ch. 2007-1, § 30, Laws of Fla. . . .

UNIVERSAL INSURANCE COMPANY OF NORTH AMERICA, v. WARFEL,, 82 So. 3d 47 (Fla. 2012)

. . . The Legislature amended sections 627.706 and 627.707, Florida Statutes (2005), and enacted sections 627.7065 . . . The trial court denied Universal’s motions with regard to sections 627.706 and 627.707 because it found . . . Sinkhole Law Backgrounds In 1981, the Florida Legislature enacted section 627.706, which required “[e . . . Chapter 2005-111, Laws of Florida, amended sections 627.706 and 627.707, Florida Statutes (2005), and . . . Section 627.706 was amended to include definitions for “sinkhole,” “sinkhole loss,” “sinkhole activity . . .

BAY FARMS CORPORATION, v. GREAT AMERICAN ALLIANCE INSURANCE COMPANY,, 835 F. Supp. 2d 1227 (M.D. Fla. 2011)

. . . . § 627.706 (1981) (emphasis added). . . . As amended, section 627.706 provides: (2) As used in ss. 627.706-627.7074 and as used in connection with . . . Stat. § 627.706(2)(k) (2011) (emphasis added). . . . Certain other revisions to ss. 627.706-627.7074, Florida Statutes, are enacted to advance legislative . . . Stat. § 627.706(l)(a), (b) (emphasis added). . . . .

WARFEL, v. UNIVERSAL INSURANCE COMPANY OF NORTH AMERICA,, 36 So. 3d 136 (Fla. Dist. Ct. App. 2010)

. . . Effective June 1, 2005, the legislature amended sections 627.706 to 627.707, Florida Statutes (2005), . . . The trial court denied Universal’s motion as to sections 627.706 to 627.707, finding that these amendments . . .

WIDDOWS, v. STATE FARM FLORIDA INSURANCE COMPANY,, 920 So. 2d 149 (Fla. Dist. Ct. App. 2006)

. . . See § 627.706, Fla. Stat. (2002). . . .

WARTH v. STATE FARM FIRE AND CASUALTY COMPANY, a, 695 So. 2d 906 (Fla. Dist. Ct. App. 1997)

. . . Section 627.706, Florida Statutes (1995), requires that every insurer in the state shall make available . . . from subterranean voids created by the action of water on a limestone or similar rock formation.” § 627.706 . . .

CINCINNATI INSURANCE COMPANY, v. W. H. F. WILTSHIRE, 472 So. 2d 1276 (Fla. Dist. Ct. App. 1985)

. . . Section 627.706, Florida Statutes, became law in 1981. . . . in the quoted policy provision is virtually identical to the following definition found in Section 627.706 . . .

H. HUDSON v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY,, 450 So. 2d 565 (Fla. Dist. Ct. App. 1984)

. . . The policy included a mandatory endorsement for sinkhole collapse coverage pursuant to section 627.706 . . .