COURT DECISION ON SINKHOLES–Structural Damage Retroactivity

SB-408 contained language intended to limit sinkhole losses by “clarifying” legislative intent with respect to the term “structural damage”.  Known to most in the industry is that structural damage was being alleged with most any visible damage–cracks, discoloration, crevices, windows that were difficult to close, minor stucco damage, settlement and so forth.

SB-408 “clarified” what was previously intended by structural damage in Fs 627.706 by using a definition taken from the Statewide Building Code.  It was thought this might help the new law apply to existing contracts. It took effect on May 17, 2011 and stated:

(k) “Structural damage” means a covered building, regardless of the date of its construction, has experienced the following:
1. Interior floor displacement or deflection in excess of acceptable variances as defined in ACI 117-90 or the Florida Building Code, which results in settlement related damage to the interior such that the interior building structure or members become unfit for service or represents a safety hazard as defined within the Florida Building Code;
2. Foundation displacement or deflection in excess of acceptable variances as defined in ACI 318-95 or the Florida Building Code, which results in settlement related damage to the primary structural members or primary structural systems that prevents those members or systems from supporting the loads and forces they were designed to support to the extent that stresses in those primary structural members or primary structural systems exceeds one and one-third the nominal strength allowed under the Florida Building Code for new buildings of similar structure, purpose, or location;
3. Damage that results in listing, leaning, or buckling of the exterior load bearing walls or other vertical primary structural members to such an extent that a plumb line passing through the center of gravity does not fall inside the middle one-third of the base as defined within the Florida Building Code;
4. Damage that results in the building, or any portion of the building containing primary structural members or primary structural systems, being significantly likely to imminently collapse because of the movement or instability of the ground within the influence zone of the supporting ground within the sheer plane necessary for the purpose of supporting such building as defined within the Florida Building Code; or
5. Damage occurring on or after October 15, 2005, that qualifies as “substantial structural damage” as defined in the Florida Building Code. 

Public Adjusters and the plaintiff’s bar are celebrating the thirteenth circuit court decision in Jackson vs. USAA which denied the retroactive application of this new SWBC definition. Appeals on this and other issues related to Sinkhole and other changes in SB-408 will continue. This is a Circuit Court decision which only addressed retroactivity of the new language not whether it was applicable going forward.  It came before the Court on June 2, 2011,  and stated simply:

Defendant’s Motion is DENIED. The Court finds that, notwithstanding recent amendments to Fla. Stat. §627. 706, et. seq., effective as of May 17, 2011, the phrase “structural damage” as it relates to the subject insurance policy in effect as of September 17, 2008 and as set forth in Fla. Stat. §627.706 (2008), is undefined, and that the Florida Legislature did not intend for a technical definition to apply. The phrase “structural damage” shall mean damage to the structure in question; in this case Plaintiffs’ house. (emphasis added)



  1. ForTheLoveofFlorida says:

    How interesting that the the statute in place as of 9/2008 did not define structural damage and that a technical definition wasn’t intended. This is mind boggling. We want insurance companies to offer coverage for sinkholes, but we don’t want to tell them what constitutes as sinkhole damage, technically. We want them to spend the money to figure it out and pay to remediate the damage that, in some cases, is caused by common settling cracks.

    • You’re a lawyer and more knowledgeable than I on sinkholes generally, so I’ll defer to you on this. The question here was retroactive application, right? So, in hindsight a tighter definition could’ve/should’ve been implemented in 2008, maybe? The attempt to obtain retroactivity in this years clarifying language failed, so far, and that’s really what was lost should the decision stand. What is your opinion as to the application of the new language going forward: new policies only, renewals, etc.?

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