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    Florida Law Changes Handling of Hurricane, Sinkhole and Wind Damage Claims

    By By Vickie Frantz, AccuWeather.com Staff Writer
    May 22, 2011, 11:13:01 AM EDT

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    Florida Governor Rick Scott signed a bill into law Tuesday that changes how claims for damages caused by hurricanes, wind storms and sinkholes will be handled.

    The new law changes to how insurance claims filed by Florida homeowners will be handled by the Citizens Property Insurance Corporation, according to Flsenate.gov.

    One of the changes is the time limit to file a claim for damages caused by sinkholes from unlimited to two-years after the damage occurs. A three-year statute of limitations on hurricane and windstorm claims will also be in place with the new law. Prior to this law, the statute of limitations for hurricane and wind claims in Florida was five years.

    The damages caused by sinkholes eligible for insurance claims will be limited to the main building on a property. Other buildings, driveways, sidewalks and swimming pools will no longer be covered. Sinkhole damage repair will be required to be completed in accordance with the insurer's professional engineer's recommended repairs.

    This new law is trying to reduce the number of homeowners who receive payments to repair their homes and then keep the money and don't do the repairs.

    The law restores a holdback on structural claims. Insurers can pay a policyholder a down payment for the damages to their home, then once a contractor is hired, the insurer will pay the contractor for the remaining work. A holdback policy on contents of the house will also be implemented. The insurer can offer a holdback policy that has a lower rate than a policy without a holdback provision.

    In the event of a dwelling loss, the insurers must initially pay the actual cash value of the dwelling minus the deductible. Subsequently, the insurers must pay any amounts necessary to perform repairs as work is performed. If a total loss of a dwelling occurs, the insurer must pay the entire replacement cost coverage without holdback of depreciation in value pursuant to the Valued Policy Law.

    A repeal of requirements currently in place for state-backed Citizens to reduce high risk areas by as much as 50 percent by 2015 is also included. Christine Ashburn, Director of Legislative Index of External Affairs with Citizens said the current law only made processing the claims for wind damage difficult for the company.

    The new law clarifies things by doing away with the Citizens' "high-risk" account and making those policies all the "coastal" account which is already established.

    Ashburn said, "The insured were never at risk of losing coverage. All the change would have done is change how the claims are handled within the company."

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