Under Florida law, property insurance policies are required to provide coverage for damage caused by sinkholes. Additionally, Florida law requires insurance carriers to investigate potential sinkhole claims with the assistance of a licensed engineer. Understand, however, that if a property owner does not agree with the conclusions of the insurance company's engineers, the property owner may elect to retain their own engineers and provide the new data to the insurance company. Florida Law Defines Sinkhole Activity While there is a great deal written about the nature and scope of sinkhole activity, Florida law makes clear what constitutes sinkhole activity. Pursuant to Section 627.706, Florida Statutes, a "sinkhole loss" means "actually physical damage to the property covered arising out of or caused by sudden settlement or collapse of the earth supporting such property only when such settlement or collapse results from subterranean voids created by the action of water on a limestone or similar rock formation." Under Florida law, if there is a reasonable basis to suspect that property damage may be the result of sinkhole activity, the insurer will conduct a complete investigation. (see also Sinkhole Investigation Procedures). The insurer must obtain a written certification from a licensed engineer, under their professional seal, that sinkhole activity has been ruled out as a cause of the damage. Once it has been determined that sinkhole activity is a cause of the settlement damage, the insurance company will pay for appropriate repairs, up to the amount of the policy limits. While repairs are being scheduled, the property owner is obligated to take all steps to protect the property from avoidable damage to the structure and to any personal property. This is legally referred to as a "duty to mitigate." A failure to take reasonable steps to prevent a worsening of the damage can be grounds for an insurer to deny or limit the available insurance coverage. Once the cost of the damage has been determined, the insured may elect to simply bank the money, rather than actually perform the repairs. However, if the insured does not actually use the funds for repair, the insurance company is entitled to limit or deny any future property damage claims. Settlement Damage Caused By Organic Material, Expansive Clays, or Loose Soils The engineering company investigating the property location may conclude that the damage is not sinkhole related. This is common, as there are multiple causes of settlement damage. If the damage arose from organic soils or because of expansive clay, it is excluded under most insurance policies. If a comprehensive examination has been conducted, the engineering company should be able to provide a solution for the settlement, regardless of whether it is sinkhole-related or not.