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In Florida, God – and sinkholes – work in mysterious ways

Sat Mar 9th, 2013 on     Homeowners Insurance,    

Last September, the owner of a Seffner, Florida, home decided to buy sinkhole insurance. He says he had never really considered it before. An inspector came to the house, checked things out and gave him the thumbs up.

Five months later, after a sinkhole swallowed a bedroom and its sleeping occupant, the 75-year-old homeowner has not only lost his friend but lost the home where he had spent 40 years of his life. Thanks in part to his new policy, though, he and his family are OK for the moment. Asked about the decision to buy the extra coverage, all he can say now is, “God works in mysterious ways.”

The personal tragedy is hard enough to grasp. The fact that the house was declared sinkhole-safe is just plain terrifying — especially considering that Seffner is not in a high-risk part of the state.

According to a geologist who specializes in sinkholes, inspections can only go so far in predicting sinkhole activity. Inspectors look for outward signs like shifting foundations and cracks in walls and driveways, he explained. Those are signs that sinkhole activity has already occurred. More sophisticated testing, including ground-penetrating radar, is needed to determine if a new sinkhole is about to collapse.

Insurance companies weigh a number of factors when determining risk, and experience is a key factor with sinkhole coverage. Florida has grappled with the issue of sinkholes for years now, and the Legislature has responded to insurers’ complaints that many sinkhole claims are frivolous by making it harder for insurance companies to pay for expensive subsurface tests. If a homeowner wants the test, he’ll likely foot the bill himself.

Existing sinkholes are concentrated in a swath across central Florida, but much of the rest of the state is at risk. A representative from the Insurance Information Institute said it best: “No one knows for certain when and where a sinkhole can happen.” The Seffner homeowner and the victim’s family can certainly attest to that.

This incident has gained national attention, and that could put pressure on Florida’s lawmakers to revisit the state’s approach to sinkhole coverage. As the housing market struggles to recover, the real estate industry may lead the charge. Florida may not want to be known as the state where you’re never more than 60 miles from the beach or 60 yards from a major sinkhole.

Source: USA Today, “Fla. home swallowed by sinkhole had passed inspection,” Rick Jervis, March 8, 2013

Our firm handles insurance coverage disputes in situations like the one discussed above. Please visit our website for more information about our Miami, Florida, practice.

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