(Note: this Guest Blog is part of a series on sinkhole issues).
We are seeing an increasing number of cases involving the ineffective repair of sinkholes. I had a recent case where the homeowner repaired the property pursuant to the carrier’s recommended repair method, which called for grouting only. When the grouting failed to correct the problem, the carrier re-tested the property at our request. After drilling 65 feet below the surface, they found no evidence of the 270 cubic yards (27 truck-loads) of grout that they had previously pumped under the house. The homeowner and I were left asking: Where’s the grout? After the testing, the carrier re-thought its initial position that the repairs had been effective.
Cases involving ineffective repairs usually take two forms. First, we see many cases where the unsuspecting policyholder agrees to do the repairs per the carrier’s recommendation and often chooses one of the carrier’s “preferred” vendors to do the work. The second are those cases where the carrier has invoked the right to repair and the repairs have failed. In these cases, the carrier has an obligation to expend the funds to restore the property to its pre-loss condition, regardless of the policy limits. That means that if the repairs fail and the cost to re-repair the property exceeds the policy limits, the carrier must still complete the repair.
In both cases, the carriers usually recommend grouting only and will not consider underpinning the property. When the repairs fail, the carriers often blame it on “normal” settlement following the grouting. It is a rare instance that the carrier will voluntarily agree to fix or reconsider the inadequate repair. How should you proceed if you suspect that the repairs were ineffective? First, notify the carrier immediately and give them an opportunity to inspect the new damage. Second, document the damage through photographs and notes. If the carrier fails to acknowledge that the repairs were ineffective, then you can ask them to re-test the property – if they insist that the repairs were effective and the property is continuing to experience damage, then possibly a new sinkhole has formed at the property. Alternatively, re-testing the property may show that the repairs were, indeed, ineffective – like in the case of the missing grout. It’s hard to argue with the scientific evidence that re-testing the property may reveal.
Note that each claim is different and must be evaluated on its merits. The key to protecting the policyholder’s rights in the case of ineffective repairs, though, is to notify the carrier immediately and to document all damage.
