Citizens floats a sinkhole fix was the headline in the Tampa Bay Times article that ran in the paper on 12/11/2013.

The article says letters will go out to “current and potentially future litigants this week that offered to pay for repairs.”  This program, which we reported on in one of our previous blogs, has been in the works for some time when it was passed out of a Citizens claim committee and sent to the full board for approval.  So based on the Times article, Citizens’ board must have approved it.

As pointed out, there are “strings attached” to this offer (who would have thought), which requires the policyholder to pay their own attorney fees, and other fees they might have incurred in the sinkhole investigation. They must also agree that no money will be paid directly to them, but instead Citizens’ preferred vendors would get all the insurance policy money in order to pour grout into the policyholder’s sinkhole. Citizens spokesman was quoted as saying; “It’s been our policy not to write blank checks.”  “This is an expansion on that.”

Based on some comments in the article, it seems some consumer advocates are in favor of this turn of events. Of course, the legal profession will be howling as no more 33 1/3% or 40% contingency fees for them.

So what is my take on this?  Well, I could not agree more with the statement “there are some strings attached.”  Well my friends, as I pointed out in my earlier blog The Liability of Fixing Sinkholes on this scheme, there are likely to be some VERY BIG strings attached.  The biggest one is who is signing the contract to repair? Is it Citizens or is the policyholder going to be forced to sign for this largeness being offered by Citizens.

You see, if Citizens hires the contractor, they are on the hook if the grout process further damages the home, or if the grout goes next door, or down the street to other neighbors sinkhole voids.  All which would require mass amounts of more grout pumped down a hole.  This reminds me of the quip; How do you get out of a hole? You stop digging! And remember grouted sinkholes have a history of coming back when the void expands or further settles into the abyss of Florida geology months or years later, long after the contractor is gone.

Another question policyholders should consider are costs, such as additional living expenses. Do Citizens and its contractors expect the families to stay in the home while the grouting crews are running around tearing up their property?  Remember, no more blank checks….the grouter is getting your money!  But maybe that’s only right and not a big deal as I am sure all the laborers for the grouting companies will have undergone thorough background checks, and are trained in insurance adjusting issues…right Citizens?

After all, a family can make do with the noise, the torn up landscape, the dirt, etc. Maybe Citizens will authorize some plastic sheets or traps so the family can be isolated in one room for the duration.  I’m being facetious but you get the picture. Is the contractor adjusting the claim or is Citizens going to be making decisions on other policy benefits?

Finally, about that blank check. When does the amount get filled in for the grouting company? I am sure Citizens will not tell the grouting company what the policy limits are, but instead tell them to pump enough grout into the hole as you can to fill the sinkhole, right Citizens? I sure hope all this grout pumping does not fill up the Florida aquifer system. No doubt Citizens has consulted the best and brightest on this one, right Citizens?

Finally, as Citizens is de facto exercising their “option to repair” I’m hopeful policyholders are not foolish enough to sign the grout company’s contract and instead require an official with Citizens (who has full written authority and a real performance bond in place for the job with an outside bonding company) to sign the contract.  So things should work out, right Citizens?

So let the grouting begin! My guess is that Citizens will sooner or later see the folly of this. It never ceases to amaze me, the more things change, the more they stay the same. What does not change is that knowledge and information also called “education” does not seem to get passed on or retained from one generation of claims people to the next.

Happy grouting to you and yours!

If you have questions regarding any property insurance related issues, please call 800.321.4488 or contact us to submit a question to one of our public adjuster or loss assessor experts.