Growing number of sinkhole claims questioned

Insurance claims for sinkhole damage are rising, and the state wants to know whether that's because Florida is seeing a lot more sinkholes or, as insurers say, because most of those claims aren't for legitimate sinkholes.

The insurance industry concedes the number of sinkholes in Florida is going up, especially in areas where new subdivisions are popping up, said Sam Miller, executive vice president of the Florida Insurance Council, an industry trade group.

But claims are rising faster, many for damage insurance companies believe came from normal settling or other normal causes, Miller said.

"In a vast majority we believe it was not a sinkhole," he said. "We simply can't prove it was not."

Sinkhole claims doubled for the state-backed Citizens Property Insurance Corp. between 2005 and 2009, Miller said. Florida Insurance Commissioner Kevin McCarty also cites a large increase in the number of sinkhole claims.

The Florida Office of Insurance Regulation has heard anecdotal reports from the insurance industry about increased sinkhole claims, said Jack McDermott, an agency spokesman.

"(But) it's hard to believe there's an explosion of sinkholes" across the state, he said.

This month, the agency is putting out a "data call" to insurance companies about sinkhole claims that it will analyze and make public. The study will consider the frequency, severity and validity of claims, as well as where they're coming from.

Some claims have come from areas outside of what McDermott calls "Sinkhole Alley"-Citrus, Hernando and Pasco counties.

Determining the rate at which sinkholes are increasing in Florida will be hampered by the lack of statewide records of sinkhole locations.

There is no question, though, that sinkholes will always be part of Florida life.

Like hurricanes, tornadoes, wildfires and lightning strikes, sinkholes are an unpredictable and unpreventable force of nature Floridians have to deal with, experts say.

"It's just one of those risks, like earthquakes in California," said Ann Tihansky, a hydrologist with the U.S. Geological Survey.

Generally, sinkholes form when the layer of sand or clay over an underground void gives way.

Most of Florida sits atop limestone that is vulnerable to sinkhole formation as rain dissolves the bedrock and creates voids from the size of a pinhole to vast underground cave systems.

"You can have sinkholes form anywhere there's limestone beneath the surface," Tihansky said.

Much of the Tampa Bay area is especially susceptible to sinkholes - from slowly forming depressions to dramatic yawning cavities, such as the one that opened July 11 in a condominium parking lot near the University of South Florida.

Massive sinkholes, such as that one that swallowed a car, could happen any time, nearly any place in the state.

In places with just a thin layer of sand or clay over the limestone, sinkholes may not become gaping chasms, said Harley Means, a geologist with the Florida Geological Survey. When the frosting of soil over the limestone is thicker - about 30 to 200 feet - the sinkholes can be much larger and form abruptly. This type of geologic condition covers much of central and eastern Hillsborough, central Pasco and nearly all of Pinellas.

Even in a region where the geology favors sinkhole formation, you can't tell when or where one will appear.

"It's just not possible to predict," said Means.

Companies can detect underground cavities with ground-penetrating radar, by drilling and with electrodes. A void, though, doesn't guarantee a sinkhole will form.

"Almost anyplace you drill in Florida you're going find a void," Means said. "That doesn't mean it's going to be unstable."

You can get some hints about the likelihood of sinkholes on your property by looking at surrounding areas, checking with local building departments or the water management district.

"If you know it's an area where there are lots of sinkholes, if one is on adjacent property, that's a clue," Means said.

There isn't a clear source to check about an area's sinkhole history, though.

Florida hasn't systematically tracked sinkholes since about 1995, said Mark Stewart, a hydrologist and professor with the University of South Florida's Department of Geology. The Florida Sinkhole Institute, based at the University of Central Florida, kept a sinkhole database until funding ran out about 15 years ago, he said.

The Southwest Florida Water Management District tracks sinkholes, but only if someone reports one.

Because of rising sinkhole claims in Pasco and Hernando, homeowners in those two counties have to request additional coverage, at an extra cost, said Nina Banister, a spokeswoman with the state Department of Financial Services.

Elsewhere, sinkhole coverage is part of most homeowners' policies.

Insurance companies will cover the damage if a sinkhole swallows your house, but it has to meet four requirements:

The ground must collapse abruptly.

The depression has to be clearly visible.

Structural damage must include the foundation.

The house must be condemned, and you must be ordered to leave.

The insurance industry is questioning claims for less catastrophic damage.

Insurance policies don't cover damage from settling or shifting clay under a foundation Banister said.

The shifting and settling can cause damage such as cracking walls or doors that don't shut, and mimic sinkhole damage.

Those are the types of claims that are outpacing damage caused by sinkholes, Miller said.

Under state law, homeowners can get an independent evaluation of the damage, repair estimate and/or finding of cause from the Department of Financial Services, in the event of a dispute with an insurance company, Banister said. The evaluation is not binding but can be used in court.

The financial services department selects the company doing the evaluation, which is paid for by the insurance company. Those investigations can cost $10,000 or more, Miller said.