Personal Lines Bulletin

Eligibility Changes: Sinkhole Loss for Multiperil Risks and Occupancy Rule for Wind-Only Risks

נובמבר 14, 2013 - ATB #020-13

The Florida Office of Insurance Regulation (OIR) has approved Citizens’ new sinkhole eligibility rules and occupancy rule changes, which became effective October 31, 2013.

Sinkhole Eligibility Changes: Personal Residential Multiperil (PR-M) Risks

Both the eligibility and uninsurable properties rules have been amended to state that any property with prior sinkhole damage is ineligible for coverage unless the damage has been repaired and/or remediated.

The changes also clarify eligibility for specific policy types and coverages, inspection requirements and required documentation.

The current sinkhole rules in the PR-M underwriting manuals have been separated into two new provisions:

  1. Eligibility – Sinkhole
    The rule defines the requirements for obtaining Sinkhole Loss coverage when there is sinkhole exposure or the property has had a prior sinkhole loss.
  2. Risks to be Submitted Unbound – Sinkhole Exposure
    This revised rule specifies the type of documentation required to substantiate sinkhole repairs and the policy type available.

Type of Repair or Remediation

The Risk Will Be Eligible for:

The Following Documentation Must Be Submitted:

If the property was repaired in accordance with the original insurer’s engineer’s investigative report HO-3
  1. Investigative findings report
  2. Scope of completed repairs documenting that recommended repairs were made
  3. Sinkhole inspection report
  4. Four-point inspection report
  5. Comprehensive interior and exterior photos
If the property was repaired by alternate means other than that recommended by the insurer’s engineer’s report

All of the following types without Sinkhole Loss coverage: 
HO-3 HO-8

  1. Certification from a professional engineer stating:
      • The insured location has been repaired
      • The insured location has been stabilized
      • There is no evidence of unrepaired structural damage to the building, including the foundation, at the risk location
  2. Sinkhole inspection report
  3. Four-point inspection report
  4. Comprehensive interior and exterior photos
If proof of repair is insufficient or documentation is not available DP-1-Dwelling without Sinkhole Loss coverage
  1. Sinkhole inspection report
  2. Four-point inspection report
  3. Comprehensive interior and exterior photos
  4. No evidence of existing damage or current sinkhole activity


Occupancy Rule Changes: Personal Residential Wind-Only (PR-W) Risks

The following occupancy rule changes apply to all wind-only policy forms.

Citizens’ prior occupancy rules required that dwellings are to be used exclusively for residential purposes, whether owner- or tenant-occupied. This definition did not include short-term rental occupancies.

Eligible occupancy definitions have been broadened to include a dwelling rented to others.

Note the following:

  • To be eligible for Homeowners (HW-2) and Mobile Homeowners (MW-2) policies, the dwellings must be primarily owner-occupied. Limited incidental rentals will be eligible except for either of the following situations:
  • The dwelling is rented to guests more than three times in a calendar year for periods of fewer than 30 days or one calendar month, whichever is less.
  • The dwelling is advertised or held out to the public as a place regularly rented to guests.
  • Condominiums rented to others are eligible for HW-6 policies without being subject to the frequency, duration or advertising restrictions applicable to HW-2 and MW-2 policies. These policies must have the Unit-Owners Rental to Others (HW 17 33) endorsement attached.
  • Dwellings rented to others are eligible for DW-2 and MD-1 policies without being subject to the frequency, duration or advertising restrictions applicable to HW-2 and MW-2 policies.

Underwriting manuals have been updated to reflect these changes.


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