Upon receipt of a claim for a sinkhole loss to a covered building, Florida law requires insurance companies to inspect the premises to determine if there has been structural damage that may be the result of sinkhole activity.
If the insurer discovers structural damage which is consistent with a sinkhole loss, or if the insurer is unable to identify a valid cause of such damage, the insurer must engage a professional engineer or geologist to conduct testing to determine the cause of loss within a reasonable professional probability. The professional engineer or geologist will provide a report of their findings to the insurer.
Following the receipt of the report or the denial of a claim for a sinkhole loss, the insurer is required to notify the policyholder of their right to participate in the neutral evaluation program.
If your insurance company denied a claim for loss or damage based on the results of the testing, or you cannot agree on the method of repair and remediation, you have the option to request a Neutral Evaluation. This alternative dispute resolution process, which involves the use of a state-certified Neutral Evaluator, is authorized under Section 627.7074, Florida Statutes. “Neutral evaluator” means a professional engineer or professional geologist who has completed a course of study in alternative dispute resolution designed or approved by the Department of Financial Services (department) for use in the neutral evaluation process and who is determined by the department to be fair and impartial.
If the insurer denied the claim because it concluded there was no structural damage, you must demand testing to determine the cause of loss before you can request a Neutral Evaluation. Your demand for testing must be made to your insurer in writing within 60 days of the claim denial and you must pay 50% of the actual costs of the testing or $2,500, whichever is less. If a sinkhole loss is confirmed, your insurer will reimburse you. Either the insured or insurer can initiate the use of a Neutral Evaluator if a sinkhole report has been issued.
Neutral Evaluation is mandatory if requested by you or your insurer. The evaluator must be allowed reasonable access to the interior and exterior of the covered building to be evaluated. The insurer is required to pay the reasonable costs associated with the Neutral Evaluation program; however, it is not required to pay for a court reporter hired by the insured. The evaluation is non-binding and does not invalidate the appraisal clause that may be included in your insurance policy. Both parties retain their right to pursue legal action. However, filing a request for neutral evaluation tolls the applicable time requirements for filing suit for 60 days following the conclusion of the neutral evaluation process or the time prescribed in F.S. 95.11, whichever is later.
Return the completed form to the address listed below:
Neutral Evaluation Section
Florida Department of Financial Services
200 E. Gaines Street
Tallahassee, Florida 32399-0322
Florida Statute 627.7074