Frequently Asked Question about Florida Homeowners Insurance Sinkhole Claims [Part I]

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Sinkholes can have a devastating financial impact by causing extensive structural damage to a home.  While sinkholes pose a serious risk to homes in Florida, many homeowners do not have policies that cover sinkhole damage except under fairly narrow circumstances.  A homeowner can purchase sinkhole coverage, but this will involve paying a higher premium.  This blog is designed to answer frequently asked questions about sinkhole claims.

How does a sinkhole occur?

Because limestone is a porous rock that entraps and transports groundwater, the soil that rests above the limestone can cause erosion of the limestone creating a cavity.  The heavy surface layer can cause the ground underneath of a home to collapse.  This collapse can create a sinkhole.  When heavy rains are followed by a period of drought and combined with pumping of significant amounts of ground water by residents this may contribute to sinkhole activity.  Suddenly occurring sinkholes that result in ground collapse have become more common during the last several decades because of the diversion of surface water, extraction of groundwater and creation of ponds.

What constitutes a sinkhole under Florida insurance law?

Florida Statute Section 627.706 provides the key statutory basis for sinkhole related issues and definitions.  According to the statute, a “sinkhole” is defined as a “landform created by subsistence of soil, sediment, or rock as underlying strata are dissolved by groundwater.”  Section 627.706(1)(h) provides that a sinkhole is caused by a collapse into subterranean voids initiated by eroding limestone or dolostone or by subsidence as these minerals dissolve.

“Sinkhole activity” is defined under Section 627.706(1)(i) as settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments or rock materials into subterranean voids created by the effect of water on limestone or other minerals formations.

“Sinkhole loss” is defined under Section 627.706(1)(j) as damage to a covered structure or foundation caused by sinkhole activity. 

Does Florida law require standard homeowners insurance policies to include sinkhole coverage?

While Florida law once required homeowner insurers to cover sinkhole losses, insurance industry lobbying persuaded the Florida legislature to drastically limit the obligation of insurance companies to provide sinkhole damage.  Florida insurance law only requires standard Florida homeowners policies to cover “catastrophic ground cover collapse.”  Sinkhole damage is defined differently than catastrophic ground cover collapse.

Can I expect that my home site has been inspected for sinkhole risk prior to a sales transaction being consummated?

There is no requirement that a home be inspected for potential sinkholes.  Because builders have a motivation to minimize unnecessary expense, they frequently do not conduct an inspection to detect potential sinkhole activity.  While sellers are legally required to disclose known sinkhole activity, there is no assurance that a home seller will comply with this requirement.

Can I have a contractor inspect a property prior to signing documents to purchase a home?

Although you should make sure an inspection is conducted, you cannot simply rely on any contractor to determine if a property might be vulnerable to sinkhole activity.  An appropriate expert will be a licensed professional geologist with training and experience in identifying soil conditions that can pose sinkhole issues.

Is there any reason to purchase sinkhole insurance if an inspection did not identify a significant risk of sinkhole activity?

While an inspection can mitigate the risk of unexpected sinkhole activity, sometimes sinkhole activity is not detectable, so you still need to consider this risk when determining whether you want to pay the extra premium for sinkhole coverage.

If you have questions about Florida insurance claims, you are welcome to contact my Florida insurance claims dispute law firm.  My sinkhole insurance claims law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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