Real estate boom & increased sinkhole claims

Across the board, our office and other property insurance lawyers are reporting a spike in claims and disputes associated with sinkhole property damage. These claims, while most common in the Hernando, Pasco, and Pinellas areas, are now seeing a dramatic increase in volume in other counties as well.

Speaking with a senior level manager of an insurance company last week who handles sinkhole property damage claims in Ocala, I was told that many insurance companies are doubling, if not tripling, their staff to handle the increase in confirmed sinkhole property losses in areas such as Gainesville and Ocala. The greatest area of concern now for insurance companies appears to be homes built during the high development era of the past 15 years.

Spike in claims caused by insufficient testing

When the recent real estate boom was in its full throes, many developers were lax in conducting pre-construction testing before commencing construction. This lack of testing for sinkhole activity was witnessed recently by one of our Ocala clients who was affected by sinkhole property damage. His home was located in a high volume development built approximately nine years ago.

Our research into public records found that prior to building more than 70 homes, the real estate developer and contractor conducted less testing than would ordinarily be called for on a single home site. This was in spite of the fact the Ocala sinkhole was near a large, confirmed area known for shallow karst activity.

Homeowners: be in the know!

In areas such as Ocala or Gainesville, where sinkhole activity had not been an issue previously, homeowners should still avail themselves to public records searches to learn of any testing, sinkhole or otherwise, that may have been done prior to construction.

Additionally, homeowners should not remove sinkhole property damage coverage for other high-risk coverage provided for by some insurance companies seeking to limit their exposure to these serious losses.