April 26, 2018


Sinking Feeling

Insurance reforms are aiming to stem sinkhole litigation.

Art Levy | 9/1/2007

Lawyers specializing in sinkhole litigation, says state Sen. Mike Fasano, “have made their millions, but the watering hole, if you will, is over for them. They have to move on or find another niche.” The reforms, he says, will eventually lead to lower premiums.

Sinkholes have been a part of Florida’s landscape ever since the peninsula emerged from the sea about 30 million years ago during the Oligocene Epoch. It’s been less than a decade, however, since some plaintiffs attorneys began finding money in them, turning sinkhole litigation into a lucrative specialty.

The insurance news industry and state lawmakers have created new rules and legislation to curb what they view as frivolous lawsuits. The question now is whether the reforms actually will dry up the money pits.

Among the legal changes implemented this year is the creation of a “neutral evaluator” mediation system that’s intended to settle sinkhole claim disputes without litigation.

Also starting this month, new homeowners’ insurance policies in Pasco and Hernando counties will no longer automatically include comprehensive sinkhole coverage. Rather, homeowners there will have to specifically request and pay for comprehensive coverage when they renew old policies or buy new ones. Otherwise, they’ll get what’s called “catastrophic ground cover collapse coverage,” which only pays after a house has been damaged so badly by a sinkhole that it has to be officially condemned — something that rarely happens.

Homeowners in the rest of the state will still automatically get the comprehensive coverage — unless they decide they don’t want to pay for it and opt out.

It’s no coincidence that Pasco and Hernando counties were targeted specifically. Bruce Douglas, chairman of Citizens Property Insurance, the state-run insurer that’s the only major company writing policies in those counties, says sinkholes can occur anywhere in the state, but that nearly 80% of sinkhole claims — and much of the state’s sinkhole litigation — originate in Pasco and Hernando.

Douglas says the region’s rapid growth in new homes and increased pumping of groundwater could be creating more sinkholes, but he thinks that “vigorous attorney action” has more to do with claims in Pasco and Hernando than the area’s geology. He points to “the unbelievable number of sinkhole claims and the billboards that the attorneys run up and down the highway. And then the size of the claims. It just got way out of hand.”

State Sen. Mike Fasano, a Republican from New Port Richey, says something had to be done to stem the growth of frivolous sinkhole claims. In 2002, for example, he says insurance companies paid less than $200,000 in sinkhole claims in Pasco County. In 2005, he says, Pasco’s sinkhole claims totaled $42.4 million.

“I’ve lived here for 36 years, and I’ve yet to see a house fall in a hole,” Fasano says. “It’s funny how the sinkholes only find themselves under homes, not under commercial businesses or out in the middle of U.S. 19.”

Fasano says the reforms will eventually lead to lower insurance premiums, more competition and, maybe, an end to sinkhole specialists. “These few attorneys have made their millions, but the watering hole, if you will, is over for them,” he says. “They have to move on or find another niche.”

Not so fast, says Ken Thomas, a lawyer at Marshall & Thomas in Trinity. He and other sinkhole specialists say there’s still plenty of business in sinkholes. “Actually, we’re the busiest we’ve ever been,” Thomas says. “We’ve seen a huge influx in additional claims. For now, we’re manning the lines.”

Adds K.C. Williams, a Tampa attorney whose website is “The insurance companies are going to keep doing everything they can to create obstacles, but we’re going to keep doing everything we can, as attorneys representing homeowners, to get what our clients are entitled to. I enjoy the challenge of a constantly changing landscape of insurance companies trying to avoid making payments on these claims.”


Florida is prone to sinkholes because large deposits of carbonate and limestone under the ground slowly dissolve as a result of water that circulates beneath the rock. When that water is removed, the deposits can fall and accelerate the process. Sinkholes can be huge, such as the 120-foot-deep Devil’s Millhopper sinkhole near Gainesville, or as small as a pothole. But sinkholes don’t have to swallow a house to do damage. Even small ones can break the foundation and create cracks in walls. The question in many sinkhole cases is whether cracks in a home’s walls or foundations stem from a sinkhole or other causes such as poor construction or just natural settling of the earth under the home.

Tags: Politics & Law, Government/Politics & Law

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