Sinkholes Are Big Business for Lawyers, Public Adjusters

by Matthew Glans on March 1, 2011

Sinkhole claims have become a serious problem in Florida, with thousands being filed for a problem that may not be as serious as the media is reporting. In a new article recently published in the South Florida Sun Sentinel, Don Brown, a senior fellow with The Heartland Institute, discusses the growing number of sinkhole claims in Florida and how trial lawyers and public adjusters are gaming the insurance system to their advantage.

“OIR has estimated that when the remaining sinkhole claims still pending are settled, losses will reach the realm of $2.4 billion. This reaches the financial impact of a hurricane.

The reason why there’s a huge increase in sinkhole claims is not the sudden swallowing up of thousands of homes by giant sinkholes, but trial lawyers and public adjusters who are “gaming” the system. When a sinkhole claim is paid, about 20 percent of the settlement goes to the trial lawyer or public adjuster. That’s a huge financial incentive.”

Brown, a former chairman of the Florida House Insurance Committee, contends the claims created in this scheme hurt consumers and place an even greater burden on the state-run insurer, Citizens Property Insurance Corporation. A collapse of Citizens could bankrupt the state.

“The state-run insurer, Citizens Property Insurance Corp., reports that for every dollar it collected in sinkhole premiums, it has paid out approximately $6.30 in sinkhole claims. Evidence suggests that these claims usually covered minor cracks and damage to the appearance of a home, with an extremely low percentage covering catastrophic collapse. In fact, catastrophic collapses accounted for only 1 percent of sinkhole claims.

We haven’t had a hurricane in over five years, so trial lawyers and public adjusters have latched onto a new cash cow. We must curb this unsustainable cycle before the system completely collapses, which is teetering on the brink.”

Don Brown’s article, “Sinkholes Are Big Business for Lawyers, Public Adjusters,” was orignally published in the Sun Sentinel February 26 and is available online at: http://www.sun-sentinel.com/news/opinion/fl-dbcol-sinkhole-claims-forum-20110226,0,1361439.story

Related Articles

  • https://outofthestormnews.com/2011/03/02/florida-legislature-must-act-swiftly-to-fix-citizens-insurance-catastrophe-fund/ Florida Legislature Must Act Swiftly to Fix Citizens Insurance, Catastrophe Fund

    [...] Matthew Glans on March 2, 2011 TweetYesterday, Out of the FIRE discussed the growing problem of sinkhole claims in the Florida insurance market, citing a piece by Heartland Senior Fellow Don Brown. Florida’s P&C insurance problem is [...]

  • http://thejusticesystem.info/sinkholes-are-big-business-for-lawyers-public-adjusters/ Sinkholes Are Big Business for Lawyers, Public Adjusters | U.S. Justice Talk

    [...] unknown posted about this interesting story. Here is a small section of the postDon Brown’s article, “Sinkholes Are Big Business for Lawyers, Public Adjusters,” was orignally published in the Sun Sentinel February 26 and is available online at: … [...]

  • Paul Handerhan

    It is disappointing to see that the insurance industry and the Florida legislature has put forward such radical insurance reforms that are so anti-consumer. When Floridians are dealing with an already difficult economy, the last thing they need is higher insurance rates for less coverage. I am confident that in the coming months the Florida Legislature will amend the current property insurance bills to give the insurance industry the necessary reforms while repealing the anti-consumer language. Floridians and the insurance industry will be best served by balanced legislation.nnPaul HanderhannPresidentnFlorida Association for Insurance ReformnnTo learn more visit us at http://www.floridainsurancereform.orgn

  • http://theaom.co.cc/2011/03/27/giant-glans/ Giant glans | TheAom

    [...] Sinkholes Are Big Business for Lawyers, Public Adjusters [...]

  • http://www.publicadjusterphiladelphia.com/ Stephanie

    Great post. I love reading about the latest in public adjustments and rules for public adjusters. I work in the industry myself. Check it out.nnhttp://www.publicadjusterphiladelphia.com/n

blog comments powered by Disqus

Previous post: Coastal Barrier Resources Act

Next post: