Tag Archives: Sinkhole Properties

Insurance Policies and Coverage Issues

Selling Your Sinkhole Home

I see advertisements for companies that buy sinkhole homes. Is that a good option for me?

Selling to a sinkhole-distressed investment company is a very good option for some of our clients. Of course, the financial aspect must work out for you, and the numbers must add up. These companies will typically purchase a sinkhole-distressed property that has not been repaired for a significantly low value and then fix it and sell it for a profit.

These companies can be useful in a couple ways: First, they provide homeowners a easy way out of what seems to be an impossible situation. Second, they repair homes that, under most circumstances, would have gone unrepaired. This helps the homeowner as well as the community get back on its feet.

Oftentimes, the devil is in the details. I’d have to know what they want and what they are giving you. Sometimes, the company buying the sinkhole home will require that you assign your insurance claim to them. This may not be good for you. However, it could be the fastest way to resolve it. You also want to make sure that if you have a confirmed sinkhole, the insurance company is not going to give you grief about any additional insurance benefits to which you may be entitled. Be careful on these.

Read my tips on filling out a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

How to Handle Living Expenses in Your Sinkhole Claims

If I have my home repaired for sinkhole damage, can I include the living expenses I incur while the repairs are being done in my sinkhole claim?

After an insurance company confirms a loss has occurred, the repairs to the property then follow. This phase of the sinkhole claim process is lengthy and wrought with obstacles to the insured. Primarily, an insured may have additional living expenses that are incurred due to temporarily vacating the residence during the repair work. Many of our clients cannot afford to continue to pay their monthly bills in addition to the costs of staying in a rental home or hotel during the completion of the repair work at their home.

A brief review of an insurance policy will identify whether such additional living expenses are provided, the limits of any such coverage, and how any such expenses will be reimbursed by the insurance company. These costs to the insured that are incidental to the repair work being performed are typically not paid by the insurance company until they are incurred (and not unless the insured demands payment for these covered expenses). In order to substantiate a sinkhole claim, it is important to save all receipts and other supporting documentation of any additional living expenses that may arise during the timeframe the insured is unable to reside in the home due to a covered sinkhole loss.

Read our tips on filling out a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Finding Sinkholes

Sinkhole Investigations and New Home Construction

I’m in the process of closing on a lot that we intend to build our dream home on. What can we do before construction to make sure we don’t have a sinkhole problem?

I speak personally to this issue. I signed a contract for a new home to be built. We asked to conduct testing on the lot before we closed, and were denied this right until we closed on the lot, but before we began the actual construction. Two weeks later, after to Standard Penetration Tests, we found patent evidence of sinkhole activity. We worked it out with the contractor, who permitted us to cancel the agreement with them.

Conducting sinkhole investigations is costly, but it may be more costly not to. Consider this: Doing two standard penetration tests cost us $3,000, but that money was well spent because it saved us a great deal of money in the long run. If you are interested in conducting a sinkhole investigation, you need to have the testing done prior to the pouring of the foundation. The important thing would be to look at the footprint of the house and test in that area. If you provide the engineering firm the building plans, they will be able to recommend the testing locations.

Also, do your own sinkhole investigation of your adjacent property owners. Ask them if they have had any problems with settlement or if they have ever filed insurance claims. While this may be a bit forward on your part, people will often share their experiences, especially because it will often include complaints about problems with insurance companies.

Lastly, you will want your engineering firm to also conduct some shallow soil work, in the form of hand augers to a depth of about eight feet. This is because you will want to determine if you have any other, soil-related problems, as well as sinkholes. Problems with excessive organic material, expansive clay, or poorly consolidated sand can also cause significant problems for you.

As always, if you have any problems locating an appropriate engineering firm, we can offer you several options. Good luck.

Read our tips on filing a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Repairing Sinkholes

Does Homeowner’s Insurance Cover Sinkholes?

Does homeowner’s insurance cover sinkholes?

Many homeowners look to their home insurance to fix every problem that occurs. Unfortunately, this is sometimes not the case and depends on your own insurance policy and your level of coverage. For example, if you elected only for catastrophic sinkhole coverage, your insurance will only be there for you if the damage is so bad, your home is condemned. That being said, what should you expect from your insurance? Does homeowner’s insurance cover sinkholes?

What is standard sinkhole coverage?

It is highly recommended that you spring for standard sinkhole coverage; though it’s pricier, and you may not think you’ll ever need sinkhole insurance, sinkholes are not easy to predict and even more difficult to pay for repairs.

If you did opt for standard sinkhole coverage, your insurance policy will cover the cost to stabilize the land and the foundation of your home. On top of that, they must also pay you the cost of any cosmetic damages resulting from the sinkhole.

The grouting loophole

Does homeowner’s insurance cover sinkholes? Well, yes, but always be aware that insurance companies are in the business to make money, and will take advantage of you if you allow them to.

One common loophole is the manner in which your land and your home are repaired. Insurance companies will usually pay to grout the soil, which is essentially one of the only ways to stabilize it. To grout the soil, a cement-based material is injected around the perimeter of the home and to an appropriate depth beneath it.

While this may sound great, this is not an appropriate repair, and your home will likely fail in the future. This is because while some areas have been stabilized, the upper 10 to 15 feet of your soil are likely unaffected by grout, leaving your home susceptible to another sinkhole. To fix this problem, the appropriate repair is underpinning, which connects your home to the ground with poles. While the right choice, this is expensive, so your insurance company is likely to avoid this route if possible.

The cosmetic damage loophole

Lastly, the insurance company must pay for the cosmetic damages to the home. This usually includes the cracking to the interior and exterior, as well as to the floors and the foundation itself.  To be exact, your insurance company is obligated to pay what is required to bring your home back to its pre-sinkhole state.

It is important that you do not receive this check until the repairs are completed because any of these cracks are not visible until the repairs are completed. If you receive payment before anything is fixed, it may feel nice to get some money to help out with your sinkhole repairs, but it is impossible for your insurance company to accurately assess how expensive repairs will be until all the damage is made clear.

Finding Sinkholes

What Causes Sinkholes?

Leave a comment

Is a sinkhole just a hole in a rock?

I found a really good site from the Department of Environmental Protection in Pennsylvania on sinkholes and what causes sinkholes to form. I especially found the portion on “what is a sinkhole” or “what is sinkhole activity” well-written and worthy of quoting here:

A common misunderstanding is to think that a sinkhole is the hole in the rock. Actually, the sinkhole is what we see on the ground surface because of the hole in the rock below. The space in the rock (known as a void, solution cavity or cave) takes hundreds or thousands of years to form. Then soil from above can move into the void in rock. If the soil is sticky, a void can form within the soil. As more soil washes down (over years or maybe just days), the void space moves toward the surface until it can’t hold together anymore. When it collapses (or subsides), you see the sinkhole on the surface. Often, you can only see soil in the hole and not the actual hole in the rock itself because the rock is too far below.

Pennsylvania sees a lot of sinkhole activity due to the amount of mining activity taking place there, much like what has happened in Polk County. The subsurface is very similar to our counties in Hernando, Pinellas, and Pasco, with a shallow limestone impacted by the movement of what over the limestone.

Read the full article.

Learn more about what causes sinkholes.

Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Sinkhole Repairs for Other Structures on Property

Other than the property coverage provided for under my insurance policy, does my insurance policy cover sinkhole repairs for other things, such as my driveway and other parts of my home?

Quite frequently sinkhole damage can occur to areas of an insured property that are separate and apart from the dwelling residence. Depending on your policy, there may be coverage for additional structures on the property. Typically, this would potentially include a guesthouse, driveway or other permanent improvement to the land.

In our experience, insurance companies will sometimes attempt to include the sinkhole repairs to damages for additional insured structures under the coverage for the main dwelling residence. This unfairly deprives the insured of other available coverage, which is separate from the insurance for the dwelling on the insured property.

For instance, an engineer hired by the insurance company confirmed sinkhole activity affecting the property and prepared a  sinkhole repair plan calling for grout to be injected under several points under the driveway. This grouting, by necessity, involved the separately insured other structure (the driveway), yet the insurance company failed to apply the other available coverage to this portion of the sinkhole repair. Instead, the insurer unfairly attempted to “lump” this segment of the sinkhole repair under the coverage for the main dwelling.

We provide analysis and answers to our insured clients about this and many other types of insurance policy questions.

Read our tips on filling out a sinkhole claim.

Have a burning question you”‘d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

Your Duties in a Sinkhole Claim Investigation

After I filed my sinkhole claim, the company contacted me and asked that I participate in an “examination under oath”? What is this, and am I required to do so?

Nearly every insurance policy has contractual language that requires the insured homeowner to cooperate during the investigation of a sinkhole claim by the insurance company. At times, an insurance company may request their insured to submit documentation and to provide a statement under oath concerning the facts of the claim.

Although this type of request during the initial investigation of a sinkhole claim is uncommon, when such a request is made, you must cooperate with the insurance company. This duty to cooperate includes providing sworn statements (an examination under oath) as well as responses to reasonable requests for documents.

Sometimes this type of investigation is premised on the theory that there was a prior sinkhole claim or that there is factual information necessary that the insurance company does not have in their possession. Regardless of why the insurance company makes these requests to substantiate your sinkhole claim, you ordinarily need to fully cooperate to the best of your ability. We have appeared at countless examinations under oath, and we know what to expect. Please contact us to discuss your legal options and to how to best protect your rights under the insurance contract and Florida law.

Read our tips on filling out a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

Insurance Policies and Coverage Issues

The Effect of Past Sinkhole Claims on a Current Sinkhole Claim

Question: After I discovered damage to my home that I thought might be sinkhole related, I found out my house had confirmed sinkhole activity before I bought it. Does this impact my sinkhole claim?

What to know about past sinkholes on your new home

If a property previously experienced sinkhole activity or was involved in a sinkhole claim, the insurance company will attempt to defend the new claim by alleging the damage is all pre-existing or was related to the past claim. A seller of property in Florida who made a prior sinkhole claim or received any settlement proceeds for a sinkhole claim will need to fully disclose the relevant details of the claim to the purchaser of such property. This would include:

  • A description of the magnitude of the sinkhole damages
  • The extent of any repairs completed at the property
  • The amount of the sinkhole claim settlement proceeds that were utilized for any repairs

An insurance company will want to know the information concerning the past sinkhole claim and if the dwelling demonstrates new evidence of continued progression of damage due to the past failed repair attempt. Having the details of any past sinkhole claim is critical to pursuing any renewed or new claim by the insured homeowner.

As long as the insured honestly puts forth all noteworthy facts to his/her home insurance company and discloses all material information about the history of the home, there should be little reason for an insurance company to not perform a fair investigation into the sinkhole claim.

Because of our experience working for the insurance carriers, we are familiar with certain tactics frequently employed by the insurance companies in fighting sinkhole claims, and we know what to expect.

Please contact us to discuss your legal options and to how to best protect your rights under the insurance contract and Florida law.

Insurance Policies and Coverage Issues

Florida Sinkhole Statutes Regulate Investigations

How sinkhole coverage is investigated

Question: If I file a claim for sinkhole coverage, what kind of investigation does the insurance company have to perform?

The Florida sinkhole statutes relating to investigations for sinkholes are very precise. These statutes require certain particularities concerning the professionals who must perform the subsidence investigations, as well as the methods and standards involved in the tests to determine the presence or absence of sinkhole activity.

What insurance will do

Some insurance carriers believe they can merely “look” at your property to make this determination or they hire an outside company to “look” at your property to determine the presence or absence of sinkhole activity, without conducting the costly testing required by Florida’s sinkhole statutes.

However, a “forensic structural investigation” is an untrustworthy, less expensive alternative relied upon by some insurance carriers, and there is typically no geotechnical data to support any competent opinion concerning the subsurface conditions at the insured property.

What you need

We are thoroughly familiar with the proper testing methods, which are vital to determine if damage to a structure is related to sinkhole or settlement activity, and we are able to address the shortfalls and deficiencies in most investigation reports.

That being said, if your insurance company has come up with an analysis of your property that is raising red flags, do not hesitate to contact a lawyer to ensure you are getting the attention you are entitled to from your insurance company.

Repairing Sinkholes

Partial Underpinning Dangerous Approach to Fixing a Sinkhole

Is partial underpinning an adequate approach to fixing sinkhole damage?

Other than denied claims for sinkhole damage (or “sink hole” depending on whom you ask), the most common question relates to how one fixes a sinkhole, whether it be in the yard or beneath the home.

When a sinkhole is fixed by partial underpinning

We spent the better part of a day this week on a case I believe worth writing about. A homeowner we represent in Ocala had a sinkhole “fixed” previously, by the use of grouting and underpinning. However, only part of the perimeter of the home was actually stabilized with underpinning.

Instead of underpinning the entire home, the insurance company’s engineer firm had instructed the insurance company to only authorize the use of six pins, to stabilize one-fourth of the home, where the damage was the worst.

Why partial underpinning doesn’t work

The easiest way to describe this cheaper approach to fixing a sinkhole would be to consider the structure of a dining room table. A table has four legs and a tabletop. The tabletop rests on the four legs, with the weight distributed evenly down the legs. If one of the legs is too short, the table will wobble. If one of the legs is missing then the table will likely fall.

The same principle applies to how to fix a sinkhole. The reason you use underpinning is that you are taking the weight of the home and removing the weight from the surface to a deeper area where the soil is stable. If you only pin portions of the home, you are now altering the weight of the home, with portions of it on the surface and the other weight being moved to the deeper soil material.

The problem is that now you have a two- or three-legged table, with areas moving, and others not. This tends to torque the house and cause other damage.

What engineers believe

We consulted multiple engineering firms – even some who work for insurance companies – and they all agreed that partial pinning was not the best approach to fixing this sinkhole. We presented these opinions to the Citizens Property Insurance Corporation representatives and hoped they listen.