Tampa-based HomeWise Preferred Insurance Co. was ordered into receivership on September 2 for purposes of rehabilitation by the Second Judicial Circuit Court in Leon County. The troubled company ceased writing business effective Sept. 2, 2010, and has no active policies or employees. It does, however, have claims, and during rehabilitation, the receiver (the Florida Department of Financial Services) will continue to process and pay those claims.

Most of the 500 or so remaining claims are sinkhole related, a coverage issue that Homewise Preferred has been fighting for some time. The battle has focused primarily on definitions and policy language. In April, a Florida court threw out its argument that it could deny a homeowner's claim because, even through sinkhole activity was found, there was no "structural damage" to the home. In August, the company argued that components of its insurance policies "inadvertently" included references to sinkhole coverage.

Sinkhole claims statewide have proliferated in recent years, drawing the attention of Florida insurers, consumers, and lawmakers. A comprehensive property bill (SB 408), was passed during the 2011 legislative session that sought to address some of those concerns. According to the bill's primary sponsor, Sen. Garrett Richter, R-Naples, the sinkhole-related portions of the bill are designed to:

• Prevent large sinkhole claim payments based on frivolous damage, which will eventually reduce premium costs for sinkhole coverage.
• Help keep houses and neighborhoods with verified sinkhole activity safe by requiring policyholders with sinkhole claims to use all insurance proceeds to repair the property.
• Require additional sinkhole testing information to be filed with the Clerk of Court, which will give potential homebuyers notice that a sinkhole was found on the property.
• Require the disclosure of sinkhole claim payments, the sinkhole report, and the certification that repairs are complete to be given to the purchaser of real property before closing.
• Require the professional engineer supervising sinkhole repairs to certify to the homeowner that they were done correctly.
• Prohibit deceptive solicitations from public adjusters.

SB 408 was signed into law by Gov. Rick Scott in May, too late to significantly address Homewise's sinkhole troubles.