Keeping Fla. Residents out of a Hole

November 10, 2003

Florida’s Chief Financial Officer Tom Gallagher is advising homeowners to be aware of the potential hazards associated with sinkholes. Gallagher also urged homebuyers to make sure they have the appropriate insurance coverage, especially those who live in the greater Tampa Bay area or West Central Florida.

“Unfortunately, sinkholes do occur in Florida,” Gallagher said. “Homeowners should take steps to protect their home and family from these natural disasters.”

Gallagher advised that if a sinkhole has appeared on one’s property or a portion of their home has shifted or sunk, take these steps immediately:
* If one’s family is in danger, evacuate immediately. Secure or remove valuables only if they can do so safely.
* Mark the sinkhole with fencing, rope or tape to warn others of the danger. Residents could be held liable if someone is injured in the sinkhole.
* Notify one’s insurance company or agent.
* Notify one’s city or county building inspection department.

If a resident decides to file an insurance claim for sinkhole damage, their insurance company will probably order a geological report that will establish the cause of the damage. If the testing confirms that a sinkhole was the cause, their insurance company should pay for the testing and repairs, less any applicable deductibles. Homeowners should be aware that other natural phenomena, such as shifting due to a soft clay foundation, can mimic damage caused by sinkholes. If testing proves that the damage was not caused by a sinkhole, residents may be held responsible for a portion of the cost.

For potential homebuyers, sinkholes should be a consideration when purchasing homeowners insurance. Make sure this coverage is included in one’s policy or in a rider attached to the policy. Authorized or licensed insurance companies in Florida are required by law to make this coverage available. Surplus lines carriers aren’t required to offer it, but many do.

Other steps one should take when buying a home:
* Hire a home inspector who can help residents find signs of potential sinkhole activity, including cracks in the foundation or exterior walls.
* Consider sinkhole testing. While it can be very expensive, it will determine definitively if a sinkhole is present. However, it can’t guarantee that a sinkhole won’t appear in the future. In addition, an insurance company should not require residents to have this testing done prior to granting coverage.

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