Summer Bay Contract Cancellation  Violation From Neglected Sinkhole Disclosure.

ORLANDO, Fla. — Despite big changes to sinkhole insurance, the kind of destruction caused by Lake County’s Summer Bay resort collapse is still covered, according to Action 9’s Todd Ulrich.

Far more homeowners have sinkholes that don’t destroy property but still cause extensive damage.

A catastrophic collapse is now the only sinkhole damage now fully covered in Florida since the legislature approved sweeping insurance changes last year.

Under the new law, there must by an abrupt land collapse, structural damage and a condemned property.

Insurance experts told Action 9 Summer Bay’s policy should cover the company’s loss and prevent special assessments against timeshare owners.

But for traditional homeowners, many sinkhole claims are now nightmares.

At Sheryl Smith’s Marion County home, the foundation cracked wide open, doors would not close and walls split from ceilings, but her insurance claim was turned down despite an engineering report that identified catastrophic failure.

Many insurance adjustors said the new law gives insurance companies an easy way to deny, delay and limit claims.

“They will fight you on the methods of repair so they can keep it cheap and the cosmetics above ground,” said Smith.

Smith said she was tired of fighting and agreed to a settlement that left her with a $70,000 loss she blames on the sinkhole and Florida’s new insurance rules.

“It should be covered or why have it?” she said.

The law was changed because the state found contractors and adjustors abused coverage for minor repairs.

Florida does have a mediation program to review sinkhole claim denials.

While Summer Bay Resort has not, as of the time this is being written, added any update to its website, it has posted the following statement on its Facebook page:

“In an unforeseeable natural disaster, one of the 26 buildings on our Summer Bay Resort property was affected by a sinkhole.

Thanks to the quick response of our staff and first responders, there were no injuries, and all guests were able to leave the building safely .We are working diligently to relocate and assess the needs of all of our guests.

Geologists are onsite assessing the area to ensure that the damage is contained.

If any current or future guests have any questions or concerns, please contact our customer service staff at 1-800-654-6102 or customerservice@summerbayresort.com.

Thank you for your well wishes and continued support.”

Resort owner and President Paul Caldwell says,  “After the geologists’ initial survey here, they’ve indicated it is what they describe as a classic Florida sinkhole about 100 feet in diameter and on a preliminary basis, they do not have a concern that it is growing or will grow.” Caldwell adds, “We are open for business … we are attempting to make this as normal an experience for our guests and our team as we possibly can.”

Later today, the U.S. Geological Survey team is expected to have more specific information on the sinkhole’s stability. Summer Bay Resort is actually southwest of Orlando, a few miles from Walt Disney World, and located in the city of Clermont, one of the areas in Florida that is most susceptible to sinkholes. High levels of limestone in the soil and underground cavern formations  allow the soil to shift with  rising and falling ground water levels eroding the bedrock beneath the soil’s surface.

Summer Bay Resort occupies approximately 300-acres.