Homeowners Sue Insurer Over Sinkhole Coverage Denials

Law360, New York (September 23, 2013, 2:17 PM ET) -- A Farmers Insurance Group company has been accused of evading Tennessee laws obligating homeowners insurance carriers to offer sinkhole loss coverage, according to a putative class action removed Friday to federal court.

The complaint says that despite Tennessee statutes directing insurers to extend optional coverage for losses from a sudden sinkhole collapse, Farmers affiliate Mid-Century Insurance Co. has issued thousands of homeowners policies in the state without informing policyholders that such coverage had to be purchased separately.

Named plaintiffs Jack and Barbara Hollins were allegedly told...
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