Jill Overmyer

Florida usually sits near the top of the list of most expensive places to insure a home in the National Association of Insurance Commissioners' annual reports. Sinkholes share some of the blame.

Sinkhole damage in Florida totaled $1.4 billion from 2006 through 2009, according to a 2010 report from the Florida Office of Insurance Regulation. A total of 24,671 homeowner's insurance claims directly related to sinkhole activity were reported during that time.

What are sinkholes?

Sinkholes are depressions in the ground caused by eroded underground limestone. As acidic waters move through the limestone, it dissolves, creating large cavities. If enough erosion occurs, the soil (and structures) on top of the limestone no longer have enough support and collapse, resulting in a sinkhole.

While sinkholes occur naturally over time, development of land (including new homes and buildings, retention ponds and roads) can speed up the process.

Florida is more susceptible to sinkholes than other parts of the country, according to Sinkhole.org, because it rests on a bed of limestone that is constantly cracking and dissolving as a result of acidic waters in the soil. If you live in Florida, you already may know that sinkholes pose a serious threat to Floridians -- and to homeowner's insurance costs.

The good news for Florida residents is that Florida law requires insurance companies to cover damages related to sinkholes. The bad news: Residents pay for this coverage through increases in insurance premiums. One of Florida's leading insurance companies, Florida Peninsula Insurance, proposed a rate hike of 18 percent to 20 percent for policies without sinkhole coverage and 3 percent to 5 percent for homes with sinkhole coverage.

Insurance companies hope the increases in premiums will help offset costs associated with sinkhole claims. One Florida insurance company, Citizens Property Insurance, says it took in just under $20 million in sinkhole premiums in 2009 but ended up paying $97 million in sinkhole claims.

Protecting your home from sinkholes
The key to protecting your home from sinkholes is to recognize the problem early and fix it. According to Sinkhole.org, some signs you may have sinkhole damage on your property include:

  • Cracks in the driveway.
  • Cracks in your home's foundation or exterior, especially those that resemble a stair-step formation.
  • Cracks on the walls and ceilings inside your home.
  • Physical depressions in your yard.
If you suspect sinkhole damage, contact your homeowner's insurance company as soon as possible.