FAQs | Best House Buyer in Florida

What is a sinkhole?

A sinkhole is a depression in the ground that has no natural external surface drainage. Basically, this means that when it rains, all of the water stays inside the sinkhole and typically drains into the subsurface.

Sinkholes are most common in what geologists call, “karst terrain.” These are regions where the types of rock below the land surface can naturally be dissolved by groundwater circulating through them. Soluble rocks include salt beds and domes, gypsum, and limestone and other carbonate rock. Florida, for instance, is an area largely underlain by limestone and is highly susceptible to sinkholes.

When water from rainfall moves down through the soil, these types of rock begin to dissolve. This creates underground spaces and caverns.

Sinkholes are dramatic because the land usually stays intact for a period of time until the underground spaces just get too big. If there is not enough support for the land above the spaces, then a sudden collapse of the land surface can occur.

Find more information about sinkholes at the USGS Water Science School.

Are sinkholes dangerous?

Cover-subsidence sinkholes tend to develop gradually where the covering sediments are permeable and contain sand. Not really your typical sinkhole, this type is not common, and can often go undetected for long periods of time – which is pretty much the only thing that can make them dangerous.

Types of Sinkholes

The three major types of sinkholes know to us are : Solution, Cover Collapse and Cover Subsidence.

1. Solution sinkholes are most commonly seen in areas that have a very thin cover of soil on the surface, exposing the bedrock below to continual erosion by water. As the water percolates through the bedrock, it carries away small parts of the rock with it. As the bedrock erodes, particles collect in the spaces it leaves. Over a period of time, a small depression is formed. It is at this point where the hole forms. The hole is usually bowl shaped and can be quite large. Sometimes the bedrock may collapse all of a sudden to form such a solution sinkhole and other times it happens over time.

2. The second kind of sinkholes are known as Cover Collapse sinkhole. These take place when the bedrock is covered by a deep layer of soil and earth. Once the bedrock begins to get eroded, crack start forming in the rocky areas around it. When this happens, a number of weak points begin to form in the layers of soil and strata above it. Finally, it comes to a point when the weak points become a large hole within the bedrock that cannot support the weight above it. The cover collapse usually happens in a sudden manner and can create large holes in a matter of minutes.

3. The last kind of sinkholes are known as Cover Subsidence Sinkhole. In this case, the hole is formed over a period of time. The bedrock here is covered by soil and materials which are not well knitted together. Areas that have soil comprising largely of clay or sand often face the occurrence of this hole. Once the bedrock starts to erode, the clay or sand starts permeating through the cracks and settles into the spaces left behind. Over time, this creates a cavity on the surface of the soil and not under it.

What are the signs of a sinkhole?

Sinkholes rarely strike without giving some warning in the surrounding environment or in a nearby home. Here are signs to watch for that may indicate a problem:

Trees or fence posts that tilt or fall
Foundations that slant
New small ponds that appear after rain
Cracks in the ground
Sudden drainage of a pond
Rapid appearance of a hole in the ground
Dips, depressions, slopes that appear in a yard
Dead patches of grass or plants
Sinkholes in the neighborhood
Wilted vegetation in a limited area
Well water that is discolored or contaminated with debris
Cracking or buckling of home’s concrete slab
Presence of odd bugs like slugs and centipedes in the home
Earthy odor in home after rain
New or widening c
Separation between walls and ceiling or floors
Cracks in interior walls
Cracks around door and window frames
Cracked grout between tiles
Cracked tiles
Stairstep cracks in blocks or bricks
Uneven floors, warping of hardwood, bulging or sagging sections
Doors or windows that don’t open or close easily
Cracks in sheetrock near doors or windows

All homes are subject to some settling. Any of these signs could exist without the presence of a sinkhole; however, the presence of one or more calls for further careful observation and an abundance of caution.

Florida’s Top 10 Sinkhole-Prone Counties

Top 10 Sinkhole-Prone Counties in Florida are:

Pasco
Hernando
Hillsborough
Marion
Pinellas
Citrus
Polk
Orange
Seminole
Lake

Are sinkholes covered by homeowners insurance in Florida?

In Florida, insurance companies are required to provide homeowners insurance coverage that includes damage from “catastrophic ground cover collapse.” They are also required to offer sinkhole damage coverage as an option, and it generally appears in a rider that comes at an additional cost. The insurance law defines catastrophic ground cover collapse in a different way than it defines a sinkhole.

Catastrophic Ground Cover Collapse

By Florida law, four conditions must be met for Florida homeowner’s insurance to cover damage (building and contents) from catastrophic ground cover collapse:

The sinking of the top layer of soil must occur abruptly.
A depression in the ground cover must be clearly visible without the aid of instruments.
There must be structural damage to the home, including the foundation itself.
A government agency must condemn and evacuate the structure.

Settling or cracking of a structure does not automatically trigger coverage for catastrophic ground cover collapse.

Damage from a sinkhole that meets all the above conditions should be included in coverage for a catastrophic ground cover collapse. Damage from a sinkhole that does not meet the above conditions will not be covered, unless sinkhole coverage has been purchased separately.

Changes in Florida Insurance Law

In most states, coverage for home damage due to earth movement is not required. Only Tennessee and Florida require certain kinds of coverage for earth movement. Until 2007, sinkhole insurance coverage in Florida was very broad. In 2007, the Florida legislature passed Florida Statute 627.706, which requires insurance companies to provide all homeowners with coverage only for catastrophic ground cover collapse. Broader coverage for less severe damage from sinkholes was changed to an optional coverage (which would cost more).

Sinkhole claims tripled between 2007 and 2011, according to the Tampa Bay Times. There was not a clearly defined threshold for what structural damage was covered. Insurance companies faced major losses. In 2011, the legislature passed Florida Senate Bill 408, narrowing the scope of qualifying damage. Also, money paid for claims then had to be used to repair the property. Other provisions under the current law also include the following:

A sinkhole loss must include structural damage that includes the foundation.
Structural damage must involve foundation movement that exceeds an acceptable variance in the building code, and it must cause the structural systems to be unable to support the loads they were designed for.
There is a 2-year limit for filing sinkhole damage claims.
Homeowners who accept a rebate from a contractor after filing a claim risk having their sinkhole insurance voided and having to repay the rebate.

Time limits for testing by the policyholder, signing of repair contracts, and repair completion were established.

How many sinkholes happen a year in Florida?

Florida is familiar with sinkholes. More than 6,500 sinkhole insurance claims are reported each year in the Sunshine State, BBC reported in 2014. But sinkhole-related deaths are rare in the state. Mr. Bush’s death was the state’s first fatal collapse in decades.

How much is sinkhole insurance in Florida?

A sinkhole homeowners insurance endorsement in Florida can seem expensive at first. Most policy quotes range from $2,000 to $4,000 a year and can come with a high deductible. Considering, however, that the average sinkhole insurance claim exceeds $100,000, the quotes you find may prove worth the added cost.

How deep are sinkholes in Florida?

The sinkhole, which is located in an area of karst bedrock, is approximately 80 metres (260 ft) in diameter and 30 metres (98 ft) deep with many mature trees growing on the floor of the hole. At the level of the surrounding ground, the sinkhole covers an area of approximately 1.3 acres.

What are the sinkhole warning signs?

In many cases sinkholes don’t form suddenly — they build up slowly over many months or years.

Its the last stage, when the formation of the hole or basin is at the very surface, that’s sudden.

Here are signs that might indicated you have a slow-burning sinkhole on your hands:

Fresh cracks in the foundations of houses and buildings
Cracks in interior walls
Cracks in the ground outside
Depressions in the ground
Trees or fence posts that tilt or fall
Doors or windows become difficult to open or close
Rapid appearance of a hole in the ground

How to sell sinkhole house in Florida 2019?

A person’s home and/or property are usually their biggest investment. The thought of having your home or business labeled a “sinkhole property” is terrifying for most. Thankfully, many of you will never need to deal with selling a sinkhole property. Under Florida law if a property has sinkhole activity you must disclose this information when you sell the property.

There are a number of warning signs that sinkhole activity may be taking place on a property, but these warning signs can vary depending upon the type of sinkhole formation. There are three basic types of sinkholes, all of which occur in Florida: solution sinkholes, subsidence sinkholes and collapse sinkholes. Collapse sinkholes, thought to be the most common type in Florida, usually happen abruptly and are most often triggered by constant fluctuations in the water-table.

What can I do if a sinkhole appears on my property?

Safety first! Cautiously fence or rope off the area as best you can. You can use rope, caution tape, traffic cones, etc. Where possible place warning sign(s) in clear view of the hole or depression warning people of the danger. Keep children away!
Carefully remove any nearby items (i.e., cars, boats, etc.), but under no circumstances should you endanger your life to protect property.
Contact your local water management district.
Contact your homeowners insurance company.
Consider contacting an attorney who handles sinkhole claims. Many sinkhole attorneys offer free consultations and may even come out to your property to view the damage and answer your questions.

When it comes to the sale of your sinkhole property there are two options. You can sell the property “as is”, often at great financial loss. If a confirmed sinkhole property is not repaired, it is almost always sells far below market value of comparable properties (without sinkhole involvement). The other option is to repair the sinkhole damage and then sell the property. If you decide to repair your property (home or business) we can assist in selecting reputable, licensed contractors and repair companies. We can also review any work or sales contracts and/or documents.

Is it safe to buy a repaired sinkhole home?

In general, if a repair has been certified by a licensed engineer and completed to the satisfaction of the homeowner’s insurance company, it is probably safe. However, as you are dealing with natural systems, there can be no guarantees that a repaired sinkhole will not cause future problems

Can sinkholes be fixed?

Insurance may cover an evaluation and the repair if it is actually a sinkhole and not a subsidence incident—a manmade problem caused by things like collapsed or broken sewer pipes and drainpipes, broken septic tanks and buried trash, or soil that wasn’t properly compacted after excavation work.

How much does sinkhole home repair cost?

Underpinning a home with sinkhole damage may cost $10,000 to $20,000. Compaction grouting, a more durable and costly method, could cost up to $100,000. Translation: With a 10 percent deductible, a homeowner would have to pay $30,000 out of pocket to fix a house valued at $300,000 before any insurance kicks in.

How much does a sinkhole inspection cost?

Unfortunately, the cost for a certified sinkhole inspection makes it difficult to pay for one unless absolutely necessary – a sinkhole investigation can run you$6,000-$8,000. This is a steep fee for a buyer who hasn’t even purchased the home yet, with all the costs that go with that first step.

How can I sell my unrepaired sinkhole home?

First, you cannot hide if you have had a sinkhole. It is public record, and when selling your home you are obligated by law to disclose any and all defects on the property, which includes sinkholes. (Side note, it’s better to be upfront about it now, because you don’t want your neighbors to be the ones giving out the news later, and trust me they will say something, as they should.)

Second, if you have had the home repaired both interior and exterior, GOOD FOR YOU. You MUST keep all documentation on file. The engineer report, the repairs performed on the home, and any information regarding your insurance pay out on the property. This will be extremely helpful when it comes time to put it on the market, and it’s going to help your resale value. Right now (2014), repaired sinkhole homes still take a slight hit when they are up for resale. Roughly, it’s about ten percent less the value* assessed for property. So if you home is worth $100,000, it’s going to take 10% right off the top and it’s now worth about $90,000. Part of the reason for this is because even though they are repaired most big banks WILL NOT do mortgages on the properties. It can, also, be challenging, although not impossible, to get homeowners insurance. Thus, the reason the paperwork is so crucial and must be kept in a safe place. (Read between the lines and make copies and put in a safe deposit box, etc.)

Third, now let’s talk unrepaired sinkhole homes. Whether you believe it to be right or wrong, people did it. They took the payout for the repairs on the sinkhole from their insurance company and then never repaired the home. These homes will not sell for more than 50%-60% of their value*, most likely. It’s better if they have the engineer report still on file, but they still won’t get top dollar. So if the home is accessed at $100,000, these homeowners will be lucky if they get $50,000 for their home. (Please don’t shoot the messenger, I just tell it like it is.) Here’s the reason why, obviously the property is unsecured, so you won’t get any homeowners insurance, and NO BANK will give a mortgage on the property, so it has to be cash deal. (If there is a bank that does unrepaired sinkhole mortgages please let me know.) These homes become a bigger problem when they are foreclosed on because usually the previous homeowner has taken off with the engineer report in hand, and the bank is left with nothing.

Florida Sinkhole Insurance Facts

In most states, coverage for home damage due to earth movement is not required. Only Tennessee and Florida require certain kinds of coverage for earth movement. Until 2007, sinkhole insurance coverage in Florida was very broad. In 2007, the Florida legislature passed Florida Statute 627.706, which requires insurance companies to provide all homeowners with coverage only for catastrophic ground cover collapse. Broader coverage for less severe damage from sinkholes was changed to an optional coverage (which would cost more).

Sinkhole claims tripled between 2007 and 2011, according to the Tampa Bay Times. There was not a clearly defined threshold for what structural damage was covered. Insurance companies faced major losses. In 2011, the legislature passed Florida Senate Bill 408, narrowing the scope of qualifying damage. Also, money paid for claims then had to be used to repair the property. Other provisions under the current law also include the following:

A sinkhole loss must include structural damage that includes the foundation.
Structural damage must involve foundation movement that exceeds an acceptable variance in the building code, and it must cause the structural systems to be unable to support the loads they were designed for.
There is a 2-year limit for filing sinkhole damage claims.
Homeowners who accept a rebate from a contractor after filing a claim risk having their sinkhole insurance voided and having to repay the rebate.

Time limits for testing by the policyholder, signing of repair contracts, and repair completion were established.

Can you buy sinkhole insurance in Florida?

In Florida, insurance companies are required to provide homeowners insurance coverage that includes damage from “catastrophic ground cover collapse.” They are also required to offer sinkhole damage coverage as an option, and it generally appears in a rider that comes at an additional cost.

What is Sinkhole house Insurance law in Florida?

A new law regarding sinkhole insurance became effective this past January, just in time for one of the worst sinkhole seasons Florida has seen in years. This law will especially impact residents of two particular counties, Pasco and Hernando, because private insurers are no longer required to automatically include sinkhole coverage in homeowner policies. Instead, the policies may protect for more limited circumstances, like those of catastrophic ground cover collapse damage. Sinkhole insurance policies now come with hefty additional fees. Who is responsible for the repairs caused by sinkholes, which are naturally occurring land-surface depressions typically found in limestone-rich areas? What role do the homeowner’s insurance companies operating in Florida and the Florida government have in aiding those impacted by sinkholes? These and other questions may help resolve the debate among many Floridians about whether to drop, add or renew comprehensive sinkhole insurance.

Can insurance companies require me to purchase sinkhole insurance?

Some private insurance companies may insist that you purchase sinkhole insurance. Even though it increases the cost of a policy, it does also raise the risk factor for the insurance carrier. Because of the increased risk, many insurers who operate in Florida do not mandate sinkhole insurance nor do they cover sinkhole damage.

Will insurance companies cancel my existing sinkhole insurance?

Insurance companies may cancel a sinkhole policy at any time. For residents of Pasco and Hernando counties, automatic drop notices have already been given because of the new law and a jump in sinkhole claims and costly payouts.

If my sinkhole coverage is dropped by a private insurer, what is the next best option?

There is a government insurance option if a private carrier drops your sinkhole coverage. Most people in Pasco and Hernando counties are either already insured under Citizens Property Insurance Corp. (Citizens), Florida’s state-run homeowner insurance company, or they will be within the next decade. For other counties in Florida, homeowners may select sinkhole coverage with Citizens or a private insurer as needed and available.

Do I have to use insurance payout money to fix my home?

If you receive insurance money for a sinkhole claim, Florida now requires you to use this money to fix the damage your home suffered as a result. This rule arose from an unfortunate practice where some homeowners who suffered sinkhole damage and were paid by the insurance companies never fixed their sinkhole problems. Instead, they sold their properties for 50 or 60 cents on the dollar, causing the whole community to suffer.

Is it possible that sinkhole coverage will get more expensive?

The price of sinkhole coverage in Florida is on the rise whether you choose to pay for it through Citizens or a private carrier. Homeowners can decrease sinkhole insurance costs, however, by increasing the deductibles for personal items and windstorm damage. It is also a good idea to ask for a windstorm mitigation discount, which can reduce premiums, on average, between 12 to 13 percent.

Additionally, you can employ an appraiser to review your home’s structural integrity and reassess its value. If the result of the appraisal is below the insurer’s home replacement estimate, the insurance company can make an adjustment and save you money.