The 2023 Florida Statutes (including Special Session C)

Title XXXVII
INSURANCE

Chapter 627
INSURANCE RATES AND CONTRACTS

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F.S. 627.707

627.707 Investigation of sinkhole claims; insurer payment; nonrenewals.—Upon receipt of a claim for a sinkhole loss to a covered building, an insurer must meet the following standards in investigating a claim:

(1) The insurer must inspect the policyholder’s premises to determine if there is structural damage that may be the result of sinkhole activity.

(2) If the insurer confirms that structural damage exists but is unable to identify a valid cause of such damage or discovers that such damage is consistent with sinkhole loss, the insurer shall engage a professional engineer or a professional geologist to conduct testing as provided in s. 627.7072 to determine the cause of the loss within a reasonable professional probability and issue a report as provided in s. 627.7073, only if sinkhole loss is covered under the policy. Except as provided in subsections (4) and (6), the fees and costs of the professional engineer or professional geologist shall be paid by the insurer.

(3) Following the initial inspection of the policyholder’s premises, the insurer shall provide written notice to the policyholder disclosing the following information:

(a) What the insurer has determined to be the cause of damage, if the insurer has made such a determination.

(b) A statement of the circumstances under which the insurer is required to engage a professional engineer or a professional geologist to verify or eliminate sinkhole loss and to engage a professional engineer to make recommendations regarding land and building stabilization and foundation repair.

(c) A statement regarding the right of the policyholder to request testing by a professional engineer or a professional geologist, the circumstances under which the policyholder may demand certain testing, and the circumstances under which the policyholder may incur costs associated with testing.

(4)(a) If the insurer determines that there is no sinkhole loss, the insurer may deny the claim.

(b) If coverage for sinkhole loss is available and the insurer denies the claim without performing testing under s. 627.7072, the policyholder may demand testing by the insurer under s. 627.7072.

1. The policyholder’s demand for testing must be communicated to the insurer in writing within 60 days after the policyholder’s receipt of the insurer’s denial of the claim.

2. The policyholder shall pay 50 percent of the actual costs of the analyses and services provided under ss. 627.7072 and 627.7073 or $2,500, whichever is less.

3. The insurer shall reimburse the policyholder for the costs if the insurer’s engineer or geologist provides written certification pursuant to s. 627.7073 that there is sinkhole loss.

(5) If a sinkhole loss is verified, the insurer shall pay to stabilize the land and building and repair the foundation in accordance with the recommendations of the professional engineer retained pursuant to subsection (2), with notice to the policyholder, subject to the coverage and terms of the policy. The insurer shall pay for other repairs to the structure and contents in accordance with the terms of the policy. If a covered building suffers a sinkhole loss or a catastrophic ground cover collapse, the insured must repair such damage or loss in accordance with the insurer’s professional engineer’s recommended repairs. However, if the insurer’s professional engineer determines that the repair cannot be completed within policy limits, the insurer must pay to complete the repairs recommended by the insurer’s professional engineer or tender the policy limits to the policyholder.

(a) The insurer may limit its total claims payment to the actual cash value of the sinkhole loss, which does not include underpinning or grouting or any other repair technique performed below the existing foundation of the building, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs in accordance with the recommendations set forth in the insurer’s report issued pursuant to s. 627.7073.

(b) In order to prevent additional damage to the building or structure, the policyholder must enter into a contract for the performance of building stabilization and foundation repairs within 90 days after the insurance company confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation. This time period is tolled if either party invokes the neutral evaluation process, and begins again 10 days after the conclusion of the neutral evaluation process.

(c) After the policyholder enters into the contract for the performance of building stabilization and foundation repairs, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and the expenses are incurred. The insurer may not require the policyholder to advance payment for such repairs. If repair covered by a personal lines residential property insurance policy has begun and the professional engineer selected or approved by the insurer determines that the repair cannot be completed within the policy limits, the insurer must complete the professional engineer’s recommended repair or tender the policy limits to the policyholder without a reduction for the repair expenses incurred.

(d) The stabilization and all other repairs to the structure and contents must be completed within 12 months after entering into the contract for repairs described in paragraph (b) unless:

1. There is a mutual agreement between the insurer and the policyholder;

2. The claim is involved with the neutral evaluation process;

3. The claim is in litigation; or

4. The claim is under appraisal or mediation.

(e) Upon the insurer’s obtaining the written approval of any lienholder, the insurer may make payment directly to the persons selected by the policyholder to perform the land and building stabilization and foundation repairs. The decision by the insurer to make payment to such persons does not hold the insurer liable for the work performed.

(f) The policyholder may not accept a rebate from any person performing the repairs specified in this section. If a policyholder receives a rebate, coverage is void and the policyholder must refund the amount of the rebate to the insurer. Any person performing the repairs specified in this section who offers a rebate commits insurance fraud punishable as a third degree felony as provided in s. 775.082, s. 775.083, or s. 775.084. As used in this paragraph, the term “rebate” means a remuneration, payment, gift, discount, or transfer of any item of value to the policyholder by or on behalf of a person performing the repairs specified in this section as an incentive or inducement to obtain repairs performed by that person.

(6) If the insurer obtains, pursuant to s. 627.7073, written certification that there is no sinkhole loss or that the cause of the damage was not sinkhole activity, 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 actual costs of the analyses and services provided under ss. 627.7072 and 627.7073; 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 subsection only if the policyholder requested the analysis and services provided under ss. 627.7072 and 627.7073 and the insurer, before ordering the analysis under s. 627.7072, informs the policyholder in writing of the policyholder’s potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim.

(7) An insurer may not nonrenew any policy of property insurance on the basis of filing of claims for sinkhole loss if the total of such payments does not equal or exceed the policy limits of coverage for the policy in effect on the date of loss, for property damage to the covered building, as set forth on the declarations page, or if the policyholder repaired the structure in accordance with the engineering recommendations made pursuant to subsection (2) upon which any payment or policy proceeds were based. If the insurer pays such limits, it may nonrenew the policy.

(8) The insurer may engage a professional structural engineer to make recommendations as to the repair of the structure.

History.—s. 1, ch. 92-146; s. 4, ch. 93-401; s. 19, ch. 2005-111; s. 26, ch. 2006-12; s. 25, ch. 2011-39; s. 15, ch. 2012-151.

F.S. 627.707 on Google Scholar

F.S. 627.707 on Casetext

Amendments to 627.707

Arrestable Offenses / Crimes under Fla. Stat. 627.707

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

S627.707 5e - FRAUD - RENUMBERED SEE REC# 7311 - F: T

S627.707 5f - FRAUD - REPAIR SINKHOLE DAMAGE OFFER REBATE - F: T

Annotations, Discussions, Cases:

Cases from cite.case.law:

RINGELMAN, v. CITIZENS PROPERTY INSURANCE CORPORATION,, 228 So. 3d 602 (Fla. Dist. Ct. App. 2017)

. . . Section 627.707, Florida Statutes (2011), sets forth the procedures for resolving sinkhole claims. . . . Id. § 627.707(5) (emphasis added). . . .

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

. . . This provision is consistent with section 627.707(5)(b), Florida Statutes (2010), . . . .

BARTON v. CAPITOL PREFERRED INSURANCE COMPANY, INC., 208 So. 3d 239 (Fla. Dist. Ct. App. 2016)

. . . their attorney, submitted a claim and request for sinkhole testing to Capitol, pursuant to section 627.707 . . . Section 627.707 sets forth an insurer’s obligation to investigate sinkhole claims. . . .

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

. . . See §§ 627.707, 627.7074, Fla. Stat. (2009). . . .

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

. . . it would abide by the WRS evaluation report and provide payment for the damages pursuant to section 627.707 . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. NUNEZ, 194 So. 3d 1064 (Fla. Dist. Ct. App. 2016)

. . . See §§ 627.707-.7074, Fla. Stat. (2010). . . . . § 627.707(1). . . . . §§ 627.707(2)(a), .7073(1). . . . professional engineer as provided under s. 627.7073, and in consultation with, the policyholder.” § 627.707 . . . See § 627.707(3). Citizens paid to repair the above-ground damage to the home. . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. DUENAS, 192 So. 3d 1268 (Fla. Dist. Ct. App. 2016)

. . . Because the insurance policy contained a loss settlement provision tracking the language of section 627.707 . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. SIMONEAU L., 197 So. 3d 70 (Fla. Dist. Ct. App. 2016)

. . . Because the insurance policy contained a loss settlement provision tracking the language of section 627.707 . . .

CITIZENS PROPERTY INSURANCE CORP. v. RIVER OAKS CONDOMINIUM II ASSOCIATION, INC. a k a II, 190 So. 3d 1110 (Fla. Dist. Ct. App. 2016)

. . . breach of contract based in part on Citizens’ failure to conduct the investigation required by section 627.707 . . . Section 627.707 provided in part as follows: (1) Upon receipt of a claim for a sinkhole loss, an insurer . . .

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

. . . See § 627.707, Fla. Stat. (2008). . . . THE ROLE OF “EFFICIENT PROXIMATE CAUSE” UNDER SECTION 627.707 Although the claims adjusting procedures . . . See § 627.707(1). This determination triggered Citizens’ obligation to hire the expert. . . . See § 627.707(4). . . . A letter from Citizens to its insured denying a sinkhole claim pursuant to section 627.707(4) at least . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. AMAT, 198 So. 3d 730 (Fla. Dist. Ct. App. 2016)

. . . This language is consistent with. section 627.707(5)(b), Florida Statutes (2010). . . . Because the insurance policy-contained a loss settlement provision tracking the language of section 627.707 . . . the provisions of policies such as the one at issue in this case and as authorized under section § 627.707 . . .

ROKER, v. TOWER HILL PREFERRED INSURANCE CO., 164 So. 3d 690 (Fla. Dist. Ct. App. 2015)

. . . (Fla. 2d DCA 2010) (affirming the trial court’s decision not to apply an amended version of section 627.707 . . . The 2010 version of section 627.707(5), Florida Statutes (2010), states in part as follows: (a) Subject . . . Tower Hill argues on appeal that section 627.707(5) should be read to require the insured to enter into . . .

CITIZENS PROPERTY INSURANCE CORPORATION, v. MUNOZ, 158 So. 3d 671 (Fla. Dist. Ct. App. 2014)

. . . See § 627.707(2), (4), Fla. Stat. (2010). . . . Indeed, as this court has recently noted, “‘the [sjection 627.707(c) presumption in favor of the insurer . . .

R. DIAZ v. TOWER HILL PRIME INSURANCE COMPANY,, 152 So. 3d 835 (Fla. Dist. Ct. App. 2014)

. . . After inspecting the property in compliance with section 627.707, Florida Statutes (2010), Tower Hill . . .

HERRERA v. TOWER HILL PREFERRED INSURANCE COMPANY,, 161 So. 3d 565 (Fla. Dist. Ct. App. 2014)

. . . See § 627.707(2), Fla. Stat. (2010). . . . . § 627.707(5)(a). Madrid concluded that a sinkhole did not damage the Herreras’ residence. . . . The third motion claimed that section 627.707 allowed Tower Hill to deny the claim based on Madrid’s . . . The court ruled that “the [s]ection 627.707(c) presumption in favor of the insurer’s engineer’s report . . .

OMEGA INSURANCE COMPANY, v. JOHNSON,, 207 So.3d 245 (Fla. Dist. Ct. App. 2014)

. . . The standards for investigating a sinkhole claim are found in section 627.707, Florida Statutes (2009 . . . insurer to inspect the property for structural damage that may be the result of sinkhole activity. § 627.707 . . . Id. § 627.707(2). . . . professional engineering and geology firm to conduct testing and issue a report pursuant to section 627.707 . . . obligations by commissioning a professional engineer to identify the cause of loss and issue a report. § 627.707 . . .

TOWER HILL SELECT INSURANCE COMPANY, v. McKEE,, 151 So. 3d 2 (Fla. Dist. Ct. App. 2014)

. . . Because the insurance policy contained a loss settlement provision tracking the language of section 627.707 . . .

LoBELLO v. STATE FARM FLORIDA INSURANCE COMPANY,, 152 So. 3d 595 (Fla. Dist. Ct. App. 2014)

. . . contract based on State Farm’s failure to conduct testing for sinkhole activity in accordance with section 627.707 . . .

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

. . . a “full subsidence test”, which is a term not used in either the 2011 or prior versions of sections 627.707 . . . that: (i) They are entitled to full subsidence investigation in accordance with Florida Statute, § 627.707 . . .

STATE FARM FLORIDA INSURANCE COMPANY, v. PHILLIPS, 134 So. 3d 505 (Fla. Dist. Ct. App. 2014)

. . . State Farm responded that the sinkhole loss settlement clause and section 627.707(5)(b), Florida Statutes . . . In the instant case, section 627.707(5)(b) gave State Farm the authority to withhold payment for the . . . Section 627.707(5)(b), Florida Statutes (2010), reads, in pertinent part: The insurer may limit its payment . . . See § 627.707(5)(a) & (c), Fla. Stat. (2013). . . .

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

. . . .” § 627.707(2), Fla. Stat. (2010). . . . If required by the policy, the insurer must “pay for other repairs to the structure.” § 627.707(5)(a) . . . In addition, Section 627.707(5)(a) requires an insurer, for a “verified” loss, to pay to “stabilize the . . . Thus, neither Section 627.707(2) (“if there has been physical damage to the structure”) nor Section 627.7073 . . .

STATE FARM FLORIDA INSURANCE COMPANY, v. COLELLA,, 95 So. 3d 891 (Fla. Dist. Ct. App. 2012)

. . . In accordance with section 627.707, Florida Statutes (2006), State Farm retained an engineering firm . . . court, it received a sinkhole claim and processed that claim as it was required to do under section 627.707 . . .

GEICO GENERAL INSURANCE COMPANY, v. VIRTUAL IMAGING SERVICES, INC. a a o, 90 So. 3d 321 (Fla. Dist. Ct. App. 2012)

. . . sixty days of the filing of an appraisal award and State Farm’s receipt of proof of loss, while section 627.707 . . .

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 . . . Section 627.707(2) requires insurance companies, upon receipt of a claim for sinkhole damage, to hire . . . The trial court denied Universal’s motions with regard to sections 627.706 and 627.707 because it found . . . See § 627.707, Fla. Stat. (Supp.1992). The sunset provision, however, never became effective. . . . Chapter 2005-111, Laws of Florida, amended sections 627.706 and 627.707, Florida Statutes (2005), and . . .

MOREJON v. AMERICAN SECURITY INSURANCE COMPANY,, 829 F. Supp. 2d 1258 (M.D. Fla. 2011)

. . . granting Motion to stay pending the conclusion of the neutral evaluation process in accordance with § 627.707 . . .

GEICO INDEMNITY COMPANY, v. VIRTUAL IMAGING SERVICES, INC., 79 So. 3d 55 (Fla. Dist. Ct. App. 2011)

. . . sixty days of the filing of an appraisal award and State Farm’s receipt of proof of loss, while section 627.707 . . .

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), . . . Universal retained its experts under section 627.707(2) to conduct the testing required by section 627.7072 . . . Section 627.707 provides, in part, as follows: Upon receipt of a claim for a sinkhole loss, an insurer . . . The trial court denied Universal’s motion as to sections 627.706 to 627.707, finding that these amendments . . . Specifically, section 627.707, Florida Statutes (2005), was amended to revise the standards for investigating . . . Section 627.707(2) requires an insurer who receives a sinkhole claim to engage an engineer or professional . . . Section 627.707(2) then requires that a report be issued as provided in section 627.7073. Id. . . .

STATE FARM FLORIDA INSURANCE COMPANY, v. NICHOLS aL., 21 So. 3d 904 (Fla. Dist. Ct. App. 2009)

. . . Notwithstanding this language, State Farm contends that it is authorized by section 627.707(5)(b), Florida . . .

FEDERATED NATIONAL INSURANCE COMPANY, v. COPELAND, 932 So. 2d 310 (Fla. Dist. Ct. App. 2006)

. . . to dismiss count II of Frank and Marilyn Copeland’s claim against Federated for violation of section 627.707 . . . Section 627.707 sets forth specific minimum standards for investigating sinkhole claims. . . .