Citizens Insurance settles sinkhole coverage lawsuit

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Posted: Thursday, March 13, 2014 5:15 pm

SARASOTA, Fla. – Citizens Insurance, the state-run insurer that provides coverage to hundreds of thousands of Florida property owners, has settled a class action lawsuit over sinkhole coverage and repair.

On its website, Citizens Property Insurance Corporation highlights the recent sinkhole class action lawsuit settlement -- a move that is expected to save the company about $30 million. The settlement will also provide relief for homeowners, many of whom say they have been getting little help until this point, though the roughly 300 people receiving payments are just a small fraction of those dealing with the issue.

"Almost every day we are hearing something of a sinkhole,” says Andy Gregory of the insurance company DesChamps, Gregory and Hayes. “This is as common as an auto accident.”

"Here in Florida we are a sinkhole-prone state,” Gregory says. “We might not hear a lot of activity here in Sarasota and Manatee County, but that doesn't mean that there won’t be a time that we could. We could have a drought again and a very rainy season, and that’s were we may find out that we have a problem."

The Florida Geological Survey has produced maps that show the number of sinkholes reported in the state between 1954 and 2004. The majority of dots cover Pinellas, Hillsborough and Polk counties, though there are several on the southern end of the Suncoast.

New College profession Jono Miller says the danger is the result of the ground makeup.

"Underneath Florida is limestone and limestone can be dissolved by acidic water,” Miller says. “And rainfall is acidic, so it creates the condition that allows the limestone to dissolve and then things collapse.”

Miller says the limestone layer in Sarasota and Manatee tends to be thinker than the counties to the north, but that rain and natural springs in the area are constantly creating cavities beneath the surface. That's why Gregory says it’s important to get the proper insurance coverage.

"If there’s anything I would like for people to understand, it’s that there are serious limitations in Florida,” he says. “When it comes to the words, ‘sinkhole’ and ‘catastrophic’ are not the same thing."

In 2011 lawmakers changed the requirement for sinkhole coverage. Now insurance companies are only required to offer “catastrophic” coverage. The only problem with that is may say it requires your property to actually fall into the ground.

So, what if your house hasn't collapsed yet and is only exhibiting signs of a possible sinkhole?

Your claim could be denied, unless, of course, you actual have sinkhole coverage. But that’s been difficult to come by in recent years.

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