Florida OIR Issues Sinkhole Report

The report is the result of a data call in August by the OIR to the commercial and residential property insurance industry. Requested information, which focused on Florida sinkhole claims opened between 2006 and 2010, sought the following data points:

• The types of claims being filed
• Testing procedures to determine claim legitimacy
• Costs of inspections
• Geographic location of claims
• Legal fees and public adjuster fees
• Amount of structural loss

The report states that, "Total sinkhole costs over the sample period amounted to approximately $1.4 billion and increased from $209 million in 2006 to $406 million in 2009. The largest share of the total expense over the sample period was for the Structure Loss (54%). It was followed by Land Loss (27 percent) and Engineering Expense (12 percent)."
It further reveals that in 2006, "The total of expenses paid for closed sinkhole claims amounted to $28,347,486 and the total indemnity paid in 2006 was $163,876,153. In contrast, for the year 2009, the total of expenses paid on closed claims spiked to $41,870,403 while the total indemnity paid had increased to $220,270,928. The aggregate total of expenses during the period 2006-2010 is $161,972,893, while the aggregate of total indemnity paid is $907,147,000 during the same period."
The data shows a concentration of sinkholes in specific areas. Over 88 percent of the reported claims occurred in 13 of Florida's 67 counties: Hernando, Pasco, Hillsborough, Pinellas, Marion, Polk, Orange, Citrus, Alachua, Volusia, Broward, Seminole, and Miami-Dade. Also, Miami-Dade and Broward counties represented 2.9 percent of total claims from 2006-2009. However, data submitted for 2010 thus far shows that the proportion of total claims represented by claims from these two counties has increased to 4.2 percent. (Related stories: Dealing With That Sinking Feeling, New Florida Law Covers Sinkholes