The Florida Legislature recently considered a proposal that would have removed the requirement that insurance companies provide sinkhole coverage. Thankfully for Florida homeowners, the proposed legislation did not pass. Instead, the legislature focused on limiting what exactly qualifies as "structural damage" related to sinkhole activity, thereby limiting insurance companies' exposure to claims.
The action of the Florida Legislature was in response to insurance industry complaints of fraudulent and frivolous sinkhole claims and customers not spending the insurance payouts on home repairs. Though there has been an increase in sinkhole insurance claims, a rise in actual sinkhole activity throughout Florida, rather than fraud, is the reason for the increased number of insurance claims.
Florida Sinkhole Activity on the Rise
Reported sinkhole activity has drastically increased. Only 33 sinkholes were reported in 2006 compared to 171 in 2010. Of the 171 noted in 2010, 150 were in the same county—Hillsborough—where an increased need for irrigation of farmland led to changes in the ground below.
Geologists say the increased sinkhole activity can be tied to specific weather and land conditions. Ann Tihansky, a scientist with the U.S. Geological Survey, advises that sinkholes are somewhat predictable when:
- The ground is dry and water pumping occurs,
- Water levels are low and a big rain occurs or
- Large quantities of groundwater are pumped over a short period of time.
Between 1991 and 1998, during a period of average rainfall, approximately 55 sinkholes were reported annually. The number of sinkholes increased to 93 per year from 1996 to 2001, when the state suffered from drought, suggesting a correlation between drought and sinkholes as Tihansky reported.
Mark Stewart, a geologist from the University of South Florida, points out that it would be difficult to find an acre of ground in West Central Florida that doesn't have what he terms a 'pre-existing sinkhole.' While Stewart doesn't believe that there are more sinkholes than in past years, he believes that more people are living in areas where sinkholes occur.
Sinkhole Activity is on the Rise, Not Fraudulent Claims
While more people might be filing insurance claims for damage caused by sinkholes, evidence of fraudulent claims is not apparent. Less than one percent of total sinkhole claims were investigated for fraud between 2006 and 2010. In the same timeframe, the total number of sinkhole damage claims increased 184 percent.
The number of sinkhole damage insurance claims is expected to grow even higher as more people are being affected by sinkholes. Whether due to an increase in sinkhole activity or due to an increased population in areas where sinkholes exist, increased sinkhole activity has created the spike in insurance claims, not fraud.
Property damage caused by a sinkhole may be covered by a sinkhole provision in your homeowner's insurance; an experienced Florida sinkhole insurance attorney can help you understand the language of your policy and whether the damage to your property is covered.
