Florida Sinkholes and Your Home – Part II

This Sunday In the House, Jared welcomed Mark Nation of The Nation Law Firm. Read the following insights as they continue their discussion of Florida sinkholes – detection, investigation, insurance and legislature.
Jared: Something many of my customers have been talking about over the last couple of years is how a lot of insurance policies now are excluding coverage for sinkholes. Is that correct?
Mark: Yes. There are two types of sinkholes. One is called catastrophic ground-cover collapse. That is still covered. Think about the Winter Park sinkhole, that huge sinkhole that opened up in 1981. That type is about 1% of the sinkholes that we have here in Florida. But most of them are called cover-subsidence, which is just a weakening of the earth underneath the foundation of the home. They can cause massive amounts of damage to your home – even render it worthless – and the insurance companies have prevailed upon legislature to eliminate that coverage in most policies. It has had a devastating effect on homeowners throughout the state, and our legislature does not care; they just want to make sure that the insurance companies are protected. People talk to me all the time and say, “Well, what about this insurance crisis?” All you’ve got to do is watch the TV. If the insurance companies were having such a bad time, why are there so many ads on the TV by insurance companies trying to get more and more of this business?
Jared: Good point. Now Mark, from your experience, what is it that actually causes sinkholes?
Mark: Well, we have a specific definition here in the state of Florida of sinkhole activity: it’s a systematic weakening of the soil that results from the action of water on limestone or a similar rock formation. What this means is, in the state of Florida, we sit on top of a bed of limestone. A lot of that limestone is now dissolved or dissolving. See, when rain comes down, it goes in the soil; it picks up acid from the humus, and when that acidic water hits the limestone, the limestone starts to dissolve. This results in a systematic weakening of the soil, and then the base, where the foundation is sitting, is weakened. So we are sitting on this bed of limestone everywhere in Florida. The average sinkhole is only about five feet wide. When they are underneath the house, you are not even going to see them. That is what we had over in Tampa; it obviously got larger than that, and then the bedroom dropped right into it.
Jared: Being a contractor, people always ask me about cracks in their stucco and block and whether they should be concerned. One thing I suggest is monitor it, and when you first notice a crack, take a picture or put a mark on it, so that you can tell at what point it gets bigger. What advice do you have for customers or homeowners to protect themselves from sinkhole damage?
Mark: Absolutely keep an eye on it. After the first two years or so after the house is built, you are going to have some normal settlement cracking. With anything other than that, you need to pay particular attention. Unfortunately, one of the changes made last year in our statutes is that you have only a two-year statute of limitations. For a sinkhole claim, that seems like a long time. Man, if I had a sinkhole, I’d call in less than two years. Well, here’s how this plays out. You submit a sinkhole claim. The first thing that happens is the insurance company lawyers take what is called an examination under oath. They start asking about every single crack, and you say, “Ah, I remember I had a crack over on the west wall a couple of years ago, and I didn’t think anything of it.” Boom – you just missed the statute of limitations. They are going to shove that crack down your throat and say, “No. Sinkhole activity started more than two years ago. Claim denied.”
Jared: Wow.
Mark: It was one of the more, I think, insidious changes that were made to our sinkhole statutes, because that is how that plays out every day now – this two-year thing. If they can get you to say one of these cracks happened two years ago, or more than two years ago, they will deny your claim immediately.
Jared: So, what do you do – you notice a crack – what is it that you do?
Mark: Yeah, you think, I don’t want to submit a claim. But there is a part of our statute that says they can’t raise your rates or drop you for submitting a claim. So, the best thing to do is keep a real close eye on it, and submit it as soon as you have any concern. Here’s the hard thing, now, under the new statute; you have to prove that the damage is so significant it impairs the structural integrity of your home.
So you’ve got the two bookends. You have one little crack two years ago – claim denied – but if you don’t have enough damage to constitute impairment of the structural integrity, you don’t have a valid claim. They will say, “Well, you don’t have a valid claim, because you don’t have enough damage.” But you did have damage more than two years ago, so under both those scenarios you have no claim. It is a battle. It is just a battle.
Jared: So unfortunate.
Mark: I think our bigger concern is now with the legislative changes. People, once you have sinkhole damage at your house, you have no coverage… Let’s say you paid your mortgage for 25 years, and you have five years left. And now you have a sinkhole underneath; it’s not one of these big giant ones. It’s one that disrupts the foundation, and now you’ve got cracking. Nobody is going to buy your house. You’ve just lost all that value. What the legislature said in the legislative changes is, “That’s ok. As long as the insurance companies are protected, that’s really what matters to us.”
Jared: Mark, we have Cherie on the line; she has a question for you.
Cherie: I am new to purchasing real estate. How can you gauge the structural foundation of a house and determine the signs of a potential sinkhole presence?
Mark: Well, there are several things that you can do. When we do a sinkhole investigation, the first thing we do is get aerial photographs to see if there are sinkholes in that area. In Florida, a lot of our lakes are ancient sinkholes, so we look at that – are there a lot of round sinkholes (that look like lakes) from aerial views? That is a concern. The next thing that we do is the testing. We look for specific types of damage to the house, and that is something you can do. Look for stair-step cracking in the cinder blocks, for crumbling anywhere near the foundation or where the doors are; and look for cracking in the driveway and in the sidewalks. Look for cracking in the tiles in the floors, and see if any of them are loose. Look for areas inside where you have cracking in the walls or walls pulling away from the ceiling – or the floors pulling away from the walls. Those are all telltale signs of a foundation issue, that there is a sinking issue. Now, it isn’t always sinkholes. Sometimes it is organics in the soil or other things. But those are the easy things that you can do. Ultimately, you can hire somebody to do sinkhole testing – but you won’t want to do that, because when I hire somebody for one of my clients, it is 10,000 bucks – it is that extensive type of testing that accurately determines sinkhole activity at a particular house spot. Still, unfortunately, you may buy a house that has no damage whatsoever, and two weeks later sinkhole activity begins.
So again, the things to do are look at aerial photographs and look for damage to the house – and look at the neighbor’s houses for that stair-step cracking as well. Does that help you?
Cherie: Yes, thanks. That was very helpful.
Jared: Thanks, Mark, for spending time with us. Mark’s show, Justice for All, airs every Saturday here on WDBO at 1pm; or give him a call at 1-800 – Nation Law. Best attorney in town. No doubt about it.
Listen every Sunday at 2pm to “In The House with Ken & Jared”on WDBO’s News Talk FM96.5. Visit us online at Universal Roof & Contracting or call us now for a free estimate on your next Home Improvement Project. 407-295-7403