The subject of sinkholes elicits passionate commentary from a number of varied viewpoints. Foundation repair companies, geologists, engineers, insurance adjusters, public adjusters and attorneys who specialize in sinkhole claims all have their opinions on the subject. But what about the homeowner?
The unfortunate reality is that the general public is mostly uninformed — by choice. Sinkholes are someone else’s problem until it happens to them. I’ll admit I would be included in that group of the blissfully ignorant if I did not work for a sinkhole repair company. Now I feel compelled to inform anyone who will listen on the subject of sinkholes in Florida and their options, should they find themselves dealing with one.
The Florida Office of Insurance Regulation gathered sinkhole data near the end of 2010. The collection and results of this data were the basis of legislation (SB408) brought before the State Senate earlier this year. You can see the full report here.
The following table, taken from the 2010 report, lists the sinkhole claim breakdown by county.
“The 2,360 total claims in 2006, in contrast to the 7,244 reported in 2009, represent a 207% increase of sinkhole claims reported.” This statement alone, taken from the chart, says a lot. It’s no wonder the insurance industry is freaking out over the costs associated with these claims. Each sinkhole claim must be investigated by the homeowner’s insurance company, and if warranted, a full investigation by a qualified geotechnical engineering firm is performed. The average cost of engineering and site inspections during the years 2006-2010 was $9,466. These “soft” costs alone translate to big money when you’re investigating over 7,000 claims.
Homeowners insurance rates are based on several factors. Sinkhole coverage costs are determined specifically by your home’s proximity to another sinkhole property and are tiered down by county, city, and neighborhood. Auto insurance rates are determined in much the same way, by zip code. The crime rate statistics for one zip code over another determine part of the risk factor, and in turn, your rate.
Your coverage rates are going to increase. That’s a fact. Senate Bill 408 allowed insurance companies the option to no longer offer sinkhole loss coverage, as well as to raise their rates by more than the previously mandated 10% per year rate increase cap.
In Florida sinkholes are a real threat to your property, but thankfully, sinkholes can be repaired. There are several repair methods available, and sinkhole loss coverage is still an option, provided you elect to keep your coverage. Protect your largest asset and get the facts. If you find yourself in need of sinkhole repair, the experts at Helicon are here to help. But don’t take my word for it, hear what our customers have to say.