FINAL REPORT:
INSURANCE STUDY OF SINKHOLES
Submitted to the State of Florida
April 2005
Center for Insurance Research
Florida State University, Tallahasseee

Investigators:
Patrick F. Maroney
Cassandra R. Cole
Richard B. Corbett
Randy E. Dumm
Kevin L. Eastman
Kevin M. Gatzlaff
Kathleen A. McCullough
Consultants:
Mark Browne
James W. (Jay) Newman, Jr.
Martin M. Simons


I. EXECUTIVE SUMMARY
A. OVERVIEW
Sinkhole losses have been an ongoing issue in Florida. At the request of the 2004 Florida Legislature, a feasibility and cost/benefit study of a Florida Sinkhole Insurance Facility has been conducted. Specifically, the study examines the availability, coverage options, and costs associated with various sinkhole insurance programs. This study is divided into several major sections. Section I is the Executive Summary. Section II outlines the scope of the report and the mandate of the Legislature. The background related to prior Florida sinkhole studies is provided in Section III of the document. A discussion of several single-peril facilities related to the major points of interest outlined in the legislation is
contained in Section IV. Section V contains a summary of the sinkhole problem in Florida and the main points of consideration in designing a sinkhole facility. Section VI discusses the non-insurance sinkhole-related services that should be considered, regardless of the establishment of a sinkhole facility. Section VII discusses issues related to alternative dispute resolution, while Section VII discusses the effect of sinkholes on existing statues as they related to the availability and affordability of coverage. The final section, Section IX, provides overall conclusions and areas for further research and action. An extensive series of appendices is included with additional information related to the issues described in the report.

http://www.floir.com/pdf/Sinkhole_Study_042005.pdf