Important Changes to Florida's Sinkhole Law-Cover Collapse vs. Sinkhole Activity

The proposed sinkhole statute revision pending in the state house changes the procedure for all sinkhole claims.  Under the present statute, two types of sinkhole coverage are available in Florida:  cover collapse and sinkhole activity/loss coverage.  The first type--known as catastrophic collapse coverage--is mandatory for all homeowner's policies of insurance and only occurs in very rare circumstances.  The second-type--known as sinkhole activity/loss coverage--presently must be offered by insurance companies, but is not mandatory.  Sinkhole activity is a much more prevalent form of sinkhole formation in Florida than cover collapse.

In Florida, there are four general types of sinkhole or karst formations and cover collapse is the rarest form.  Under the statutory definition cover collapse sinkhole coverage is only implicated when a visible depression opens up in the ground and renders the structure uninhabitable.  In order for a sinkhole to qualify for the mandatory cover collapse sinkhole coverage under the statute, the sinkhole must open up and result in the home actually being condemned by a governmental authority.  This type of sinkhole is not very prevalent relatively speaking, when compared with the most common type of sinkhole which damages homes in Florida--sinkhole loss/activity.  Presently, an insurer must offer sinkhole loss/activity coverage if requested by the homeowner.

Under the proposed legislative changes pending, an insurance company would no longer be required to even offer sinkhole activity/loss coverage.  Accordingly, while the rare catastrophic collapse coverage would still be mandatory, insurance companies, under the proposed changes to the sinkhole law, would be legally entitled to not provide any coverage for the more common, and just as damaging, sinkhole activity/loss coverage.

I urge my clients and Floridians to unite and take a moment to write their state representative.  Tell them to vote no on the proposed sinkhole law changes.  Sinkhole coverage is important and, because it damages many homes throughout Florida, it is important that homeowners have both the mandatory cover collapse coverage, as well as the sinkhole activity/loss coverage option available to them to protect their largest investment--their family home.

Sincerely,

Michael Laurato
Austin & Laurato, P.A.