• Florida has more sinkholes than any other state. Sinkholes are depressions in the surface of land that appear above underground chambers known as aquifers. Aquifers hold water and are often filled with rainwater that soaks into the ground. Sinkholes sometimes develop beneath buildings or on land adjacent to buildings, causing damage and a reduction in land and property values. Home owners often insure against sinkhole damage, and contractors offer solutions to sinkhole problems in the state. Issues relating to sinkholes are governed by laws contained in the Florida Statutes.
  
  

Insurance Company Requirement

• All insurance companies selling property insurance in Florida are obliged to provide coverage for "catastrophic ground cover collapse," causing damage to property. Chapter 627.706 of the Florida Statutes, defines catastrophic ground cover collapse for insurance purposes, as being either an abrupt collapse of the land surface, a hollow in the ground that is visible to the naked eye, damage to buildings and building foundations and the need for a building to be condemned and vacated.
  
  

Sinkmhole Information Database

• Sinkholes are such a significant feature of Florida's topography the Florida State Legislature has passed a law that mandates the creation of a complete database of sinkhole activity. The law is contained in Chapter 627.7065, which states that the reason for creating and maintaining the database is to protect the public and to allow the study of insurance claims. The contents of the database is decided jointly by the Department of Financial Services and the Department of Environmental Protection.
  
  

Building Code Effectiveness

• The Florida State Legislature recognizes the need to create building code standards that take into account the damage caused by sinkholes and the amount of the claims brought against Florida insurance companies as a result. Chapter 627.7063 states that the building ordinances of each Florida county must be assessed every four years, with regard to assessing their effectiveness in reducing sinkhole damage and subsequent insurance claims. The assessment will be used to grade building codes with regard to their effectiveness. This law also states that insurance companies must offer lower insurance premiums to householders whose properties comply with the highest grade building codes, and add a surcharge to the premiums of householders whose properties only conform to the lowest grades.
  
  

Standards For Investigation of Sinkhole Claims

• In the event of a claim for damage caused by a sinkhole, an insurance company must investigate to discover whether there has been structural damage to the property, caused by the sinkhole. Chapter 627.707 states that insurers must use the services of a professional geologist, or a professional engineer to discover the cause of the damage and make a report. If the insurer cannot find the cause of the damage, or if it believes that the damage is indeed caused by a sinkhole. Insurers have to tell the claimant what they consider to be the cause of the damage, and claimants may insist on an inspection by a professional geologist or engineer, if they disagree with the findings of the insurance company.