View Full Version : Purchasing a repaired sinkhole home?
01-16-2005, 11:33 AM
We're currently bidding on a home that was a repaired sinkhole home. I have the engineering documents to back up the repair process. I'm currently searching online for Insurance as that was contingent on our offer. I am unsure as to how the Insurance industry handles sinkhole homes that are repaired. Will I be able to obtain insurance on the home we're looking at?
01-17-2005, 11:40 AM
If this is a property in Florida then you had better find out whether or not the original sinkhole "claimant" received a setllement equal to or greater than the value of the Dwelling (aka Coverage A) on their policy at the time of the loss. If so, it is UNINSURABLE through Citizens Property Insurance Corp (which seems to be the only place to go in Florda, especially with a remediated sinkhole home). If not, then it is insurable through Citizens after supplying the agent with 1) the original Geotechnical report/findings, 2) the original cosmetic estimate, 3) engineer report supporting completed remediation, 4) evidence supporting completed cosmetic repair.
Also, there is a 30 day wait from the time application is made to the date that coverage becomes effective.
Hope this information helps.
01-17-2005, 07:18 PM
Thanks for the info, it is greatly appreciated and most helpful.
Yes, the property is in Florida. The current owner is out of state (and states that they DO in fact have coverage on the home) the tax records reflect two sales. One sale was to the company who preformed the repair. (I'm guessing they go around buying the houses and make the repair and then sell.) The second sale was to the current owner. Is there a way that I can tell if someone took a settlement offer to make the home a total loss? I have my Agent researching this - by trying to get info from the listing agent - , but thought that I should do much of my own as well too. In my line of thinking, the current owner would not be able to have insurance on the home if it was a total loss, correct? Maybe I'm missing something, but being that all of this is new to me, it's very confusing!
Thanks very much for your input!
01-18-2005, 06:05 PM
Unfortunately, this new sinkhole "rule" came into play in December 2004, so that current owner may have purchased a sinkhole home that had been a total loss AND was able to procure coverage with CITIZENS. The problem would be for the purchaser of a "totalled" sinkhole home after 12/2004.
Another problem...how do you find out if the claim settlement was a total loss for the claimant? Is that a purchaser's business? What about, like in your case, when the purchaser is twice-removed?
A claims history report on the property should show it...but how does a lay-person get that report. That's where you should investigate. Try to get a "car-fax"-like report on that property. Contact CHOICEPOINT to see if there is a way to purchase a report like that.
Best of luck.
02-01-2005, 09:47 AM
Frank, remember that Citizens is still offering coverage on these homes but now with a sinkhole exclusion. When they say "Uninsurable" they mean for sinkhole coverage but not insurance totally.
02-02-2005, 06:21 PM
How are you? I hate to call you out on this one BUT...
Citizens Property Insurance Corp. is an admitted carrier in Florida. That means that the laws and rules apply. For instance, Sinkhole coverage CANNOT be excluded.
You may be confusing the Lloyd's backed companies who DO exclude sinkhole coverage (as well as mold and a hundred other things...also a 3% hurricane deductible). They are a NON-ADMITTED carrier. If the go belly up...there is no help from the state...there is no recourse. BTW Lloyd's of London has been on the "balls of their ass" for quite a while now.
Hey, it's always possible the something has changed of which I am unaware. Lord knows, they change the rules on me constantly. Let me know if I am wrong.
Thanks & take care,
PS an update: insured for $250k, year and a half of hell, went to appraisal...final judgement>>>>>$291k (and a nice Bad Faith suit in process to boot after the fact)
There is hope people. It's their ball...you just have to be patient & play.
02-03-2005, 08:33 PM
Correct, LLoyds is not admitted carrier which allows them to operate outside the admitted carrier's rules as defined by the state. Citizen's while they may be considered an "admitted carrier", they are in fact the joint underwriter's pool sanctioned by the state to offer insurance to those who cannot obtain insurance eslewhere. While I'm not exactly sure how this works, they ARE allowed to issue policies that can exclude sinkhole coverage because of thier unique status. I have spoken with multiple homowners in the past few months, all stating that Citizen's is willing to write insurance on their property once repaired but since they had a payout they will not insure again for sinkhole at this time. While this is currently being fought in the courts, they can operate like this for now.
I have read their mandate of October 15,2004 and understand what they are saying but I also know that they are offering sinkhole exclusion coverage now.
P.S. Let me know if I'm wrong!!!
You have access to them, I don't.
02-04-2005, 12:17 PM
They're killin' me over here! I will investigate that. Thanks!
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