The homeowners forms, coverages and perils are covered in the national Homeowners guide. Tennessee adds rules on sinkhole coverage, inquiries versus claims, claim handling for residential property, and public adjusters. This guide covers those.

Sinkhole coverage (Tenn. Code Ann. 56-7-130)

• Definition: a sinkhole is an underground void created when limestone or dolostone dissolves, causing the land surface to sink.
• Availability:
  • Every insurer writing homeowners coverage must make sinkhole coverage available for optional purchase. It isn't required in every policy.
  • The insurer may charge an extra premium and may inspect before issuing.
  • The coverage it offers must include personal property in the dwelling.
• Claims:
  • To deny a claim, the insurer needs written certification from a qualified engineer or professional geologist that sinkhole activity didn't cause the damage.
  • A policyholder who demands the analysis without a good-faith basis, after being warned, reimburses 50% of its cost, up to $2,500.
  • The insured must contract for stabilization and foundation repairs within 90 days after the insurer confirms coverage.
  • Until then, the insurer may pay only ACV, without stabilization or foundation costs.
  • Once the repair contract is signed, the insurer pays as the work is done. It can't require the policyholder to pay in advance.

Inquiries aren't claims (56-7-113)

• An inquiry is a question about the policy's general terms. Examples: whether a type of event is covered, or how to file a claim.
• An inquiry isn't a claim.
• An insurer can't raise the premium or cancel a homeowners policy solely because of an inquiry. Doing so is an unfair trade practice.

Claim handling for residential property (Rule 0780-01-05)

• A personal residential property policy in force 60 days or more can't be cancelled solely because a claim is pending.
• The insurer tells the policyholder they may choose the vendor for covered repairs, unless the policy calls for a specified vendor.
• Replacement items must give a reasonably uniform appearance (matching), with the insured paying no more than the deductible.

Notice and lender rules

• Nonrenewal of a dwelling policy, as personal risk insurance, needs at least 30 days' notice. The insured may request the reason within 15 days after it takes effect (56-7-1901, 56-7-1902).
• A lender can't require coverage greater than the replacement cost of the existing structures (56-8-106).

Public adjusters (56-6-902, 56-6-903)

• Anyone who acts for an insured on a first-party property claim for pay needs a public adjuster license.
• Exempt: Tennessee attorneys, and people who only provide facts or technical help, such as photographers, contractors and engineers.

Common exam traps

• Sinkhole coverage must be offered. It isn't automatic.
• A sinkhole denial needs an engineer's or geologist's certification.
• An inquiry can't trigger a premium increase or cancellation.
• A policy in force 60+ days can't be cancelled just because a claim is pending.
• Homeowners nonrenewal needs 30 days' notice.