Simon Glairy is a recognized expert in the fields of insurance and Insurtech, with a specialized focus on risk management and AI-driven risk assessment. Today, he will share his knowledge about sinkholes and their impact on homeowners, especially in areas like Florida where they are more common.
What is a sinkhole?A sinkhole is a depression in the surface of the ground caused by the sudden settlement or collapse of the land. This occurs due to processes like the natural dissolution of rock foundations by underground water.
How do sinkholes form?Sinkholes typically form in areas with large amounts of underground water that gradually dissolve rock, particularly limestone. As the rock dissolves, it creates voids and cavities. When the surface land collapses into these voids, a sinkhole is created.
How many sinkhole insurance claims were made in Florida in 2020?There were 277 sinkhole claims made in Florida in 2023, which gives an idea of the frequency of sinkhole issues in recent years.
Can you provide information on the average cost of a sinkhole insurance claim in Florida?Yes, in 2020, the average sinkhole insurance claim in Florida was over $140,000 according to the Insurance Information Institute.
Which states are the most prone to sinkholes?The states most prone to sinkholes include Florida, Alabama, Kentucky, Missouri, Pennsylvania, Tennessee, and Texas.
What specific areas in Florida are known as “sinkhole alley”?In Florida, “sinkhole alley” includes Hernando, Pasco, and Hillsborough counties.
What steps can homeowners take to avoid purchasing a property at risk for sinkholes?Homeowners should start by consulting seasoned real estate agents familiar with the area. They should also have properties inspected by local home inspectors, foundation specialists, and licensed geologists or soil engineers who can provide more detailed assessments.
Who should potential homeowners consult to assess the risk of sinkholes on a property?Potential homeowners should consult foundation specialists, licensed geologists, or soil engineers. Local insurance companies can also recommend licensed sinkhole inspectors.
What are the common signs that a home may be at risk for a sinkhole?Common signs include cracks in walls and floors, uneven or sloped floors, difficulty in opening and closing windows and doors, water leaks, creaking noises, nails popping in walls, and displaced moldings and trim work.
Why wouldn’t a general contractor or normal home inspector be enough to identify sinkhole risks?General contractors or normal home inspectors might not have the specialized knowledge and equipment needed to identify the risk of sinkholes accurately. Professionals with expertise in soil subsidence or sinkholes are necessary for such assessments.
Does a standard homeowners insurance policy cover damage caused by sinkholes?No, a standard homeowners insurance policy typically doesn’t cover damage caused by sinkholes or other earth movements. Sinkhole coverage is usually sold as an additional endorsement.
What are the specific conditions under Florida law for catastrophic ground cover collapse coverage?Florida law requires the following conditions: abrupt collapse of ground cover, a depression in the ground cover visible to the naked eye, structural damage to the building including the foundation, and a government order to vacate the structure.
How much does it typically cost to add sinkhole coverage to a policy in Florida?Adding sinkhole coverage to a policy in Florida typically costs between $2,000 and $4,000 per year.
Which other state, aside from Florida, requires insurers to offer optional sinkhole coverage?Tennessee is the only other state that requires insurers to offer optional sinkhole coverage.
Are there any states where sinkhole coverage is not offered at all?Yes, sinkhole coverage is not offered at all in California and Hawaii.
How did sinkhole insurance claims in Florida change from 2006 to 2010?Sinkhole claims in Florida increased significantly, from 2,360 in 2006 to 6,694 in 2010, with a total of 24,671 claims over that period.
What was the impact of litigation and insurance reforms on the number of sinkhole claims in Florida?Litigation and subsequent insurance reforms led to a massive drop-off in the number of sinkhole claims in Florida.
Should homeowners be worried about sinkholes?The likelihood of a home being affected by a sinkhole is relatively low, but the potential damage can be significant. Therefore, it is wise to be aware and take preventative measures.
Despite the risks, would you personally be concerned about sinkholes if you were a homeowner in Florida?While the possibility of experiencing a sinkhole event is low, I would consider sinkhole coverage for peace of mind, especially in high-risk areas like sinkhole alley in Florida.
you have any advice for our readers?My advice is to thoroughly research and consult professionals before purchasing a property in sinkhole-prone areas. It’s also important for homeowners to review their insurance policies and consider adding sinkhole coverage if they are concerned about this risk.
