In the United States, most of the damage caused by sinkholes occurs in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee, and Pennsylvania. Most of Florida is prone to sinkhole development because it is underlain by limestone or dolomite, which is susceptible to dissolution by naturally flowing groundwater. Ever so slowly, this forms underground channels, voids and cavities in the limestone or dolomite. Sinkholes form with the eventual collapse of the overlying soils down into the channels, voids and cavities below.
Sometimes sinkholes are revealed suddenly as they swallow sections of major roadways or even when buildings disappear. This makes for great evening news, but it is very rare. The more common sinkhole damage is much more subtle. Sinkholes may appear as a slight depression in a lawn, a leaning tree or fence post. When they occur underneath or around a house or building they can cause cracking of the interior walls, ceilings, floor slabs and tiles. Sinkholes will cause damage to building foundations, exterior walls, driveways and even pools and pool decks.
In Florida, they are an ever-present, naturally occurring geologic feature and one of the predominant landforms. While sinkholes are usually little more than a nuisance, sometimes they can cause substantial property damage to buildings and roads and create significant insurance claim disputes.
Some insurance policies contain coverage for this type of damage as long as the damage is caused by sinkhole activity. That being said, sinkhole claims are one of the most difficult claims for policyholders to handle due to the technical nature of the sinkhole investigation, the number of insurance company experts involved, the length of the investigative process and the complexity of the property insurance coverage issues involved. It is very important for a policyholder to understand their options for sinkhole repair under their policy and obtain a permanent fix. If not handled properly, it can affect the value of and further imperil both you and your property.
Explanation of Current Florida Sinkhole Coverage Law
and Adjusting Challenges Given the Two Types of Coverage
In 2011 the Florida Legislature passed a new insurance bill that redefined sinkhole insurance coverage. This was partly due to the volume and increasing cost of investigating and settling sinkhole claims and an apparent lack of ability for both the State and insurance companies to enforce and distinguish between valid and fraudulent sinkhole claims. In a sense Florida insurers have been allowed to redefine “sinkholes” and what is covered under a policy. Given these substantial changes, each policyholder must determine if sink hole coverage is worth the risk given the stringent requirements of what now constitutes a sinkhole and is covered under the new law defined as follows:
Catastrophic Ground Cover Collapse
All authorized carriers must provide this coverage defined as follows:
“Catastrophic ground cover collapse” means geological activity that result in all the following:
- The abrupt collapse of the ground cover;
- A depression in the ground cover clearly visible to the naked eye;
- Structural damage to the covered building, including the foundation; and
- The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.
Sinkhole Loss Coverage
In addition, the insurer shall make available, for an appropriate additional premium, coverage for sinkhole losses on any structure.
“Sinkhole loss” means structural damage to the covered building, including the foundation, caused by sinkhole activity.
“Structural damage” means a covered building, regardless of the date of its construction, has experienced the following:
- Interior floor displacement or deflection in excess of acceptable variances as defined in ACI 117-90 or the Florida Building Code, which results in settlement-related damage to the interior such that the interior building structure or members become unfit for service or represents a safety hazard as defined within the Florida Building Code;
- Foundation displacement or deflection in excess of acceptable variances as defined in ACI 318-95 or the Florida Building Code, which results in settlement-related damage to the primary structural members or primary structural systems that prevents those members or systems from supporting the loads and forces they were designed to support to the extent that stresses in those primary structural members or primary structural systems exceeds one and one-third the nominal strength allowed under the Florida Building Code for new buildings of similar structure, purpose, or location;
- Damage that results in listing, leaning, or buckling of the exterior load-bearing walls or other vertical primary structural members to such an extent that a plumb line passing through the center of gravity does not fall inside the middle one-third of the base as defined within the Florida Building Code;
- Damage that results in the building, or any portion of the building containing primary structural members or primary structural systems, being significantly likely to imminently collapse because of the movement or instability of the ground within the influence zone of the supporting ground within the sheer plane necessary for the purpose of supporting such building as defined within the Florida Building Code; or
- Damage occurring on or after October 15, 2005, that qualifies as “substantial structural damage” as defined in the Florida Building Code.
Individuals that live in high incidence sinkhole locations must weigh the cost of such coverage with the risk of a sinkhole occurring and likely meeting all the above definitions.