Pasco and Hernandez counties are well established as the centers of sinkhole activity in Florida; Florida lawmakers have gone so far as to craft unique laws governing insurance coverage for sinkholes in these two counties. However, anecdotal evidence suggests that the problem may be spreading, with sinkholes reportedly appearing as far south as Miami and Naples.
Florida Insurance Commissioner Kevin McCarty has requested claims data from both commercial and residential property insurance companies, with the hopes of better understanding these possible trends.
The sense that these events are spreading is not currently documented - the Florida Office of Insurance Regulation expects that by collecting actual data, it can determine whether this problem is truly growing.
Regulators have requested information about claims submitted throughout the state between 2006 and 2010. Among other things, regulators want details regarding the types and locations of claims, the methods of testing to determine legitimacy and the amount of structural loss.
Aggregating this data will certainly be helpful; objective information regarding sinkholes is always valuable. However, regulators will likely face significant challenges in interpreting this data.
Perhaps the biggest problem in reviewing these claims is that there is no such thing as a neutral observer. Sinkholes are incredibly costly to repair; a finding of sinkhole activity leaves either an individual property owner or the insurance company with an expensive problem.
Anyone responsible for evaluating a claim has some interest in the outcome of the claim - whether that is a public adjuster working on behalf of a property owner or a private adjuster working on behalf of an insurance company. Ultimately, an official determination by an adjuster of sinkhole activity may or may not be reliable; many insurance companies will aggressively deny valid claims.
According to the St. Petersburg Times, a spokesperson for the Florida Office of Insurance Regulation has also expressed concerns that homeowners may be making sinkhole claims simply to verify that no activity exists. Theoretically, this would lead to a surge in the number of claims without an actual surge in sinkhole activity.
From the homeowners' viewpoint, though, this is a difficult stance to accept. Sinkhole activity is so burdensome to address that it is tough to imagine anyone would seek a diagnosis without genuine concern for the property.
However, the state will soon have more than mere anecdotal evidence or conjecture; insurers were to submit data by Sept. 21, which means that the state can begin compiling the relevant information and determine whether sinkhole activity is truly increasing.
If you suspect sinkhole activity on your property, it is important to ensure that you receive a full and fair evaluation. Speak with a knowledgeable attorney to discuss the most effective way to protect your interests.