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USAA Continues to Deny Florida Sinkhole Claims
As sinkhole damage continues to plague Florida homeowners, those with homeowner's insurance through USAA are finding it harder and harder to collect on their valid sinkhole property damage claims due to USAA's narrow, and non-consumer-friendly, reading of it's own policies.
December 14, 2011 /Medical PR News/ -- USAA Insurance, a company known for providing insurance coverage exclusively to military members and their families, may be developing a bad reputation for denying legitimate claims. USAA has recently settled a number of class action suits alleging bad faith in denying personal injury protection (PIP) claims, for example:
- A case in Arizona was settled last summer for an undisclosed amount.
- An Illinois case settled in 2005 was estimated at $35 million.
Meanwhile, policyholders filed a similar lawsuit in Portland, Oregon last June.
Concern for Florida Homeowners with USAA Property Insurance
Florida state law requires homes to have sinkhole coverage, as they are prevalent in this part of the United States. Essentially, insurance must be available to remedy "structural damage" to a home caused by a sinkhole.
It is not uncommon for Florida homeowners to contact their insurer with a valid claim for sinkhole repairs, only to have the claim denied. The Sarasota Herald Tribune reported sinkhole claim denial rates of 66 percent in 2009 and 85 percent for the beginning of 2010 based on data collected by the Florida Office of Insurance Regulation.
Particularly, Florida residents who've insured their property with USAA should be concerned about USAA's willingness to cover valid sinkhole claims. USAA continues to assert a very narrow view of the coverage offered by its own insurance policies for sinkhole damage.
How Can Insurance Companies Deny Florida Sinkhole Coverage Claims?
Florida statutes do not specifically define what constitutes structural damage and USAA has applied its own very narrow definition in denying homeowner claims. USAA's denial of sinkhole claims is proper when its own investigation indicates that sinkhole activity is only 'impacting' the structure and not causing 'structural damage,' according to counsel for USAA, Jon Hall. According to USAA, a sinkhole claim may not fall within its definition structural damage in assessing what constitutes a sinkhole loss unless the sinkhole damage reaches a "technical state" of structural damage.
Under this interpretation, a sinkhole would have to literally destroy a home. More troubling, USAA has decided to apply this standard to claims filed even before the recent statutory changes in May 2011. The good news for homeowners with sinkhole damage and with USAA insurance is that the courts, particularly those in Hillsboro County, have not yet agreed with USAA's position.
USAA and Florida Bad Faith Insurance Laws
USAA's denials of Florida sinkhole claims may be viewed as insurance bad faith. Bad faith occurs when an insurer unreasonably denies or delays payment of a claim or refuses to reimburse a claimant for costs covered under the insurance contract.
Simply put, insurers may profit when they deny claims... even legitimate ones. Thousands of valid claims may be rejected by an insurer every day without contest. However, legal remedies are available to those unlawfully denied coverage for an insured event. Florida's insurance bad faith regulations allow insureds to recover the benefits promised in their contracts as well as any losses and damages stemming from a wrongful denial. This can include damages for emotional distress and attorney's fees. Punitive damages are also available if it is proven that an insurer has engaged in gross misconduct in denying claims.
An experienced insurance claims attorney in your area can answer your questions and help you understand your rights and options if your property was damaged and you and believe your valid claim for coverage was wrongfully denied.
Article provided by Corless Associates
Visit us at www.czlegal.com
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