Typically property insurance policies in Florida cover all damage to a home or a commercial building unless excluded. In a lawsuit seeking coverage for cracking or other settlement-related damage, the burden of proof was typically on the insurance company to prove that the damage was not caused by sinkhole activity but some excluded earth movement unrelated to sinkhole activity or other excluded subsidence. In recent years some insurance companies excluded coverage for sinkhole losses under the main portion of their policy but provided coverage by separate endorsement. Based on these changes, insurance companies successfully argued the burden of proof was now on insureds/the property owners to prove that their damage was caused by sinkhole activity. As a brief factual background, geologists and engineers sometimes disagree on what might be causing cracking or other apparent subsidence-related damage. In this scenario, where a jury must decide between competing experts, the party with the burden of proof may have a tougher time winning if a jury perceives a tie as a failure to meet the burden of proof. On November 26, 2014, the Second District Court of Appeal of Florida clarified the law by deciding Mejia v. Citizens Property Ins. Corp., which held that despite any sinkhole coverage being provided by separate endorsement, the burden remains with the insurer to prove that the claimed damage was not caused by sinkhole activity.
This decision benefits insureds and will make it harder for insurance companies to prove its case when there are competing opinions with regard to causes of damage.