Title Page
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    Preface
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    Examination of the establishment of minimum standards for the evaluation of sinkhole claims
        Page V
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    Need for an ongoing research resource
        Page VI
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STATE OF FLORIDA
DEPARTMENT OF ENVIRONMENTAL PROTECTION
Virginia B. Wetherell, Secretary







DIVISION OF ADMINISTRATIVE & TECHNICAL SERVICES
Nevin G. Smith, Director





FLORIDA GEOLOGICAL SURVEY
Walter Schmidt, State Geologist and Chief




OPEN FILE REPORT NO. 72

GEOLOGIC AND GEOTECHNICAL
ASSESSMENT FOR THE EVALUATION
OF SINKHOLE CLAIMS












FLORIDA GEOLOGICAL SURVEY
TALLAHASSEE
1997


ISSN 1058-1391


:'3







July 1997


The 1992 Florida Legislature mandated that a study of sinkhole insurance issues
be conducted. The study was completed by the Florida State University Center
for Insurance Research, under the direction of the Florida Department of
Insurance. The report, Insurance Study of Sinkholes, was submitted to the
Department in December of 1992 and subsequently to the appropriate
Legislative Committees.

Two chapters of that report are reproduced here in response to interest from
governmental agencies, the public, and the professional community. Chapter
V, deals with "Claims Standards." It was determined during the course of the
study that a listing of typical standards used by Professional Geologists or
Professional Geotechnical Engineers was needed to offer guidance regarding
what a competent geological assessment of a site should consider to
determine if karst processes are responsible for observed features. Chapter V is
titled: "Examination of the Establishment of Minimum Standards for the
Evaluation of Sinkhole Claims."

Chapter VI addresses the States need for an ongoing research resource to
understand and characterize sinkhole occurrences and to create a central
clearinghouse for the collection of sinkhole data and for its dissemination to the
public.. The Chapter titled: "Need for an Ongoing Research Resource" includes
input from four state university geology departments and the Florida Geological
Survey.

The reproduction of these chapters here is intended to better make available
the results of the "Sinkhole Standards Summit' which was organized by the
authors and attended by geologic experts from throughout the state. Their
resulting consensus is presented in Chapter V of the report.


Walter Schmidt, Ph.D., P.G.
State Geologist & Chief
Florida Geological Survey





























V. EXAMINATION OF THE ESTABLISHMENT OF MINIMUM
STANDARDS FOR THE EVALUATION OF
SINKHOLE CLAIMS








Clear Determination of Whether an
Insured Event Has Occurred

Contract Definitions

The appropriate place to look for the specification of the

insured event is the subject insurance contract. In this

analysis, contracts covering dwellings, i.e., Homeowners and

Dwelling (monoline fire) Forms have been the focus. Most

insurance companies operating in Florida use contract wording

identical or similar to the copyright wording of the Insurance

Services Office, Inc. (ISO). The key wording is the following

sentence, "Sinkhole Collapse means actual physical damage arising

out of, or caused by, sudden settlement or collapse of the earth

\ supporting such property and only when such settlement or

collapse results from subterranean voids created by the action of

water on limestone or similar rock formations." The "actual

physical damage" must be to "covered property." Obvious problems

arising from this seemingly simple and understandable wording

include how the word "sudden" is to be interpreted/enforced, how

evidence of the necessary "subterranean voids" is to be

established, and whether land is part of the "covered property."

The threshold issue to be decided is what types of earth

movement are to be included in the term sinkhole. The statute

specifically defining sinkhole was enacted in 1981. There have

been no cases interpreting it since that time. However, a case

which pre-dated the statute, Zimmer v. Aetna,' was decided by


1383 So.2d 999 (Fla. 5th D.C.A. 1980).
V-2








the Fifth District Court of Appeal in 1980. The Zimmer case

construed the insurance policy definition of sinkhole discussed

above. (The policy definition is almost identical to that

contained in the rules developed by the Department pursuant to

Section 627.351 F.S.)

Discussions with an individual who was involved in the

original Florida sinkhole reinsurance facility and who

participated in the drafting of the sinkhole definition

incorporated in the original rules of the Department indicated an

intent to cover those sinkholes which are sudden and overnight in

nature and amount to an immediate catastrophe.2 The Zimmer

court indicated that the legislative purpose was not to limit

losses to those of a "sudden, overnight nature, the type that

amounts to an immediate catastrophe." The court indicated the

legislative intent was to cover insurable sinkhole loss and that

the Legislature did not intend to limit sinkhole loss to damage

caused by "sudden settlement."

The Zimmer court reasoned that inclusion of the word

settlement clearly reflected the legislative purpose not to limit

losses to those of a sudden and overnight nature. The court

rejected the argument that coverage was limited to sinkholes

which instantaneously appear when the ceiling over a large void

in the subterranean layer falls because it is no longer able to

support the load above. Clearly, instantaneous sinkholes were

intended to be covered and have always been covered. Problems


2Telephone conversation of A. Butler with H. Parks.

V-3







arise, however, in those situations where damages are the result

of a continuous or slow settlement rather than instantaneous

collapse. It is in these situations where determination of the

cause of loss becomes difficult.

Apparently, as a result of Zimmer, sinkholes which gradually

manifest themselves have been covered (cover subsidence) as well

as those which appear instantaneously (cover collapse). The

Zimmer court found no statistics as to the number of each kind of

sinkhole. The court also wrote that "sinkhole losses did not

prove to be burdensome to the insurance industry." The court

referred to the April 26, 1973 Insurance Commissioner's order

which stated that during the first three years of the plan for

equitable apportionment of losses between insurers, there had not

been a single loss.

The situation where no losses exist has changed. Specific

statutory language outlining what earth movement perils are to be

covered would aid in clarifying what types of loss the

Legislature intended be covered.


CURRENT ADJUSTMENT METHODS

In order to determine the approach taken by insurers in

investigating and settling sinkhole claims, ten companies were

contacted and asked to explain the steps taken to adjust these

claims. The companies included Aetna, Allstate, GEICO, Hartford,

Liberty Mutual, Nationwide, Prudential, State Farm, Travelers,

and USAA. Although there were some differences in the details of

the claims adjustment process between companies, all followed
V-4








essentially the same basic approach. This approach consisted of

the following steps:

1. Upon receipt of a claim for sinkhole damage, the

initial response of the insurers is to send one of

their company adjusters to the site. While these

adjusters are trained in the settlement of property

claims, they are not specially trained in handling

sinkhole claims. As a result, their role is primarily

to determine if there is any obvious cause of the

damage other than sinkhole. (Some examples of such

other causes are excavations being done by the insured,

something buried in the yard, etc.) It was stressed by

all of the companies that a denial of a claim based on

a visual inspection by the company adjuster is very

rare. Similarly, unless there is an obvious sinkhole,

it is unlikely that the company adjuster will immediately

declare the loss to be covered. Several companies

estimated that a decision based on this initial

investigation occurs in less than one percent (1%) of all

reported sinkhole claims.

2. Assuming that the cause of the damage is unclear, the

companies contact a geotechnical engineering firm to

investigate the loss. The engineers/geologists usually

begin with a shallow boring since it is the least

expensive of the techniques. If the results of the

shallow boring are not conclusive, then a deep boring is


V-5







used. (In some cases, ground penetrating radar (GPR) is

used to determine the "best" places for conducting the

deep borings. One company indicated that it uses GPR on

any claim on the west coast of Florida.) The geotechnical

engineering firm submits its report and its opinion to the

company, which then makes its final decision based on the

findings of the engineers/geologists.

3. Upon a determination that a loss is caused by a sinkhole,

an engineering firm is used to determine the best approach

for repairing the damage.

All companies indicated that the benefit of the doubt is given to

the policyholder--that is, any damage reported as being caused by

a sinkhole is assumed to have resulted from a sinkhole unless

there is an obvious alternative cause, or unless a qualified

engineer/geologist states that it was not.


Use of Professional Expertise

The selection of "experts" by insurers in the detection of

sinkholes is a function of their quality, their promptness in the

submission of their findings, and the clarity of the reports they

prepare. One aspect of their professional quality which is

important to insurers is these persons' capability as courtroom

witnesses. More than one claims person commented that this is an

important issue.


V-6








Circumstances Dictatina Use

The principal circumstance dictating the use of an expert in

the adjustment of a sinkhole claim is the lack of a clear

determination that a sinkhole has or has not occurred. Normally,

there is damage to property which could have been caused by a

sinkhole but which could also have some other cause. These

include soil dryness, water tables, improper foundation design or

materials, excavation by burrowing animals, water pressure, soil

erosion, earthquake, organic matter in the soil, and others.

Where there is reasonable doubt, the rule seems to be that

some professional expertise is desirable. The best outcome of

this process is that there is a determination of the "probable"

cause at the lowest possible cost. This "lowest possible cost,"

sometimes expressed alternately as a "reasonable" cost, is a

difficult concept in practice; the insured and the insurance

company may have vastly differing notions regarding what is

"reasonable." Since the insurance companies are incurring the

adjustment costs, an insurance company may decide to pay a

questionable claim and forego the investigation because the cost

of an exact determination of cause would exceed the payout.

SINKHOLE SUMMIT

On August 28, 1992, a "Sinkhole Standards Summit" (the

Summit) was convened with eminent geologists and engineers from

the state of Florida. It was intended to bring some certainty

and consensus to the issue of minimum standards to be employed in

the determination of the whether a sinkhole has caused damage to
V-7









a structure. Thus, the main question which was addressed was

"How do you determine the cause of the damage?" Dr. Walt

Schmidt, Director of the Florida Geological Survey, was the

moderator of this discussion.

The invited participants in the Sinkhole Standards Summit

were:


Dr. Barry Beck*
Former Director of the Florida Sinkhole Research Institute
Orlando, FL

Dr. John Garlanger
Ardaman and Associates
Orlando, FL

Mr. Tony Gilboy
Southwest Florida Water Management District
Brooksville, FL
--
Mr. Jack Harrington
Brown Testing Laboratories, Inc.
Tampa, FL

Mr. Craig Hutcheson
United States Geological Survey
Tampa, FL

Mr. Ed Lane
Florida Geological Survey
Tallahassee, FL

Dr. Bill Parker*
Department of Geology
Florida State University
Tallahassee, FL

Dr. Anthony Randazzo
Department of Geology
University of Florida
Gainesville, FL

Dr. Tom Scott
Florida Geological Survey
Tallahassee, FL


V-8








Mr. William Sinclair
Environmental Consulting and Technology, Inc.
Tampa, FL

Dr. Mark Stewart, Chairperson
Department of Geology
University of South Florida
Tampa, FL

Mr. Bill Wilson
Subsurface Evaluations, Inc.
Winter Springs, FL

Dr. Walter Schmidt, Director
Florida Geological Survey
Tallahassee, FL

Mr. Bob Goehring
PSI/Jammal & Associates Division
Winter Park, FL

*These invitees were unable to attend.


Also in attendance were staff members of the Department of

Insurance and the Florida Legislature, and Larry Brown of Brown

Testing Laboratories, Tampa, Florida.

A major complaint which had been voiced by the homeowners in

Dunedin was the inconsistency across geological and engineering

firms in the identification of the cause of damage to their

homes. From the day-long discussion among these professionals

the following consensus was achieved:

1. Ideally, three professionals are needed to provide

input to the insurance companies regarding the cause of

loss: a structural engineer, a professional

geotechnical engineer, and a professional geologist.

The structural engineer would be employed initially to

give advice regarding the structural soundness of the


V-9








building when constructed. The professional geologist

would offer observations and interpretations regarding

the earth and the actual cause of the damage (given

poor construction has been ruled out by the structural

engineer). Finally, the geotechnical engineer would

supply input regarding the design of the foundation.

The use of three professionals would be in the ideal

(i.e., assuming no constraints with regard to money).

Realistically, it was agreed that, at a minimum, a

qualified individual must write the report. This

individual must be a licensed professional engineer or

a licensed professional geologist with documented

experience with foundation subsidence.

2. Standardizing the sinkhole identification process so

that each investigation is identical was deemed to be

impossible and unnecessary by these engineers and

geologists. A three-tier process was generally

accepted as being necessary (see Table V-l). A

checklist of points to consider was also recommended.

If a process on this checklist was not undertaken, the

recognition that this process was not undertaken should

be noted in the report and the justification for this

decision noted.


V-10






Table V-1


APPROACHING A SETTLEMENT INVESTIGATION
FROM A THEORETICAL STANDPOINT


PHASE 1--PRE-SITE ASSESSMENT


REQUEST: Complaint; concern; need for solution
(CLIENT)

INFO FROM CLIENT: Nature of Problem; his perception of problem;
(PROJECT ENGINEER/ where; what; when; how serious background
PROJECT GEOLOGIST)
PREL. SEARCH: Review published information--maps,
(PROJECT ENGINEER/ quads, SCS, office experience--ask share, talk to
PROJECT GEOLOGIST) senior people

THEORIES: Most probable; process of elimination; most
(COMBINED) likely what is and what is not; what do you suspect
PHASE 2--ON-SITE ASSESSMENT

SITE DATA: Visit site observe conditions in, out,
(PROJECT ENGINEER/ around, photos
GEOLOGIST) History nearby conditions, vegetation site grading,
cut/fill, utilities, wells, buried structures, new
construction coinciding with reported complaint,
type/mode of failure, pattern, trends, normal, unique,
unusual, minor, expansive, materials, additions,
construction, design, settlement of ground?

REFINE THEORIES: Form some thoughts -
(PROJECT OR SENIOR foundation/settlement related,
ENGINEERS) shallow/deep, influence from construction, etc.

PHASE 3--DETAILED SITE ASSESSMENT

DESIGN SCOPE Additional site visits, borings, pits,
OF EXPLORATIONS: details, get plans, take measurements,
(PROJECT ENGINEER/ soil tests, KEEP UP WITH FINDINGS!
GEOLOGIST)

RECONCILE: Does data support refined theory, is it or is it not
(COMBINED) a clear case do others agree/disagree?

REDEFINE SCOPE: If not a clear case regroup and redefine scope
(COMBINED)

EVALUATION: If clear case proceed with evaluation
(PROJECT ENGINEER/
PROJECT GEOLOGIST)
SOLUTION AND Make recommendations, monitor, further
RECOMMENDATIONS: studies, corrective works/alternatives,
(PROJECT OR SENIOR provide concepts of procedures depending
ENGINEERS/GEOLOGISTS)


V-ll







3. It was agreed among the geologists and engineers that a

sinkhole research institute should be created which

would provide a clearinghouse for seminars,

conferences, lectures, and the general exchange of

ideas. This would facilitate the standardization of

the sinkhole identification process and important

dissemination of information to practicing

professionals. This institute must be cross-

disciplinary, given the nature of and issues related to

sinkholes.

4. It was agreed that, often insurance adjusters are not

familiar with adjustment of claims, and that some sort

of training should be given the adjusters assigned to

adjust a reported sinkhole claim. Brochures could be

created and seminars conducted by the aforementioned

sinkhole research center. (See Appendix V-A for an

example of a claims handling guide used by the Illinois

Mine Subsidence Insurance Fund to adjust mine

subsidence claims.)


PHASE 1: PRE-SITE ASSESSMENT. This stage involves

collection of background information (either over the

phone, if possible, or in person). The following

questions should be answered.

a) When the engineering or geological firm receives

the request to investigate the home, is the damage

life threatening or catastrophic?

V-12








b) Is there a well being drilled on the property or

nearby?

c) How old is the house?

d) Does the family have a swimming pool and does it

leak?

e) Is there any excavation nearby?

f) Are you the original owner of the home?

g) Has there been any change in the vegetation

coverage?

h) Have you had any changes in the color of your

water?

i) Have you had sedimentation in your water?

j) What landscaping was done?

k) In relation to a well, have there been any

significant changes in the pumping of the well

recently?

1) What is the location of the pipes, drainage sewer

lines, and septic tanks?

m) Has there been any recent flooding?

n) Have the public utilities been involved with this

problem?


PHASE 2: ON-SITE ASSESSMENT

a) Get to know the background geological literature

for the area.

b) Draw an accurate site map to scale, to map the

ground cracks and the pattern of the cracks.

V-13






c) Take photos and do sketches of the site.

d) Look at the angled dip on the fractures. In the

initial stages of sinkhole collapse there is a

hemispherical cavity that is perhaps coming up to

the surface. If there is a dip on the cracks away

from the center of the circle, that is suggestive

evidence of a sinkhole.

e) If the homeowner has indicated that wells have

been drilled nearby, get a completion report on

any wells drilled.

f) Observe downspouts and any drainage systems.

g) Examine the alignment of trees. If the trees have

been cut off at the ground and covered, the trunks

rot and form a cavity in the ground.

h) Look for paint in the cracks (as a clue to their

age).

i) Look for any change in site conditions.

j) Locate the sewer pipe and the septic tank. Many

sinkholes can develop above a sewer line if the

line does not have the proper joint.

k) Collect all of the above information and refine

your hypothesis. If, from the above

investigation, the cause of damage can be

identified, further investigation may not be

warranted.


V-14








PHASE 3 DETAILED SITE INVESTIGATION

a) If there is some minor cracking around the

foundation, look at the footings to see if there

is buried garbage.

b) Do a shallow investigation (up to ten feet) using

test pits, hand augers, a level survey of the

floor, and ground penetrating radar.

c) Use piezometers to take readings and draw a water

table map. The water table will depress over the

center of the subsidence and this test is

relatively inexpensive.

d) Put crack-monitoring devices on the walls. Mark

all cracks.

e) If deep penetrating borings are to be used, one

must first determine where to do the borings. At

a minimum two borings must be done; one in an

unaffected area, in order to provide a reference

point, and one in what is expected to be the

center of the damage.

f) Sometimes it is desirable to drill on a neighbor's

land. Document if there are problems drilling on

a neighbor's land. If there is, a different means

of diagnosis will have to be utilized.

g) After much discussion regarding what the objective

of deep penetrating borings is, an inability to

determine the actual location of the cavity was


V-15








deemed to be insufficient evidence of the lack of

a sinkhole because a cover subsidence sinkhole can

ravel laterally. Furthermore, one could locate a

cavity and not have found a sinkhole because

cavities can have many causes, only one of which

may be a sinkhole as defined in the insurance

policy. Thus, no minimum number of deep

penetrating borings was recommended. However, a

complete justification of the decision of why

borings were or were not used was recommended.

h) To completely analyze the sediment samples, the

following measurements are recommended:

i) moisture content;

ii) if it is clay, measurement of Atterburg

limits;

iii) measurement of uncombined compressive

strength;

iv) if the cause of the damage is hypothesized

to be decaying organic soils, measurement

of the percent of organic soils;

v) measurement of the engineering performance

and behavior of the materials, e.g., the

movement or deformation of the materials

under the types of stresses that are

present at that particular site;

vi) identification of the mineralogy;


V-16








vii) measurement of density of the soil.3

i) Use an extensometer, i.e., put a pipe in the

ground down to the bedrock and put a gauge on the

pipe; observe how the ground moves relative to

that pipe. This is very expensive, about $11,000.

6. The participants recommended that an abridged report in

layman's terms be made available to the homeowners.

Currently, the standard procedure for denial of a claim

by many insurance companies is notification of the

homeowner of the basic conclusion of the investigation,

with a recommendation to the homeowner to read his or

her insurance policy.

7. If the report does not address the structural adequacy

of the building, that should be noted through a

specific statement of that fact. Otherwise, a comment

on the structural adequacy of the building should be

addressed in the report.

8. Some of the damage which masquerades as sinkhole

damage, but is really caused by faulty construction,

could be avoided by stricter building codes.

Furthermore, damage from sinkholes could be limited

through stricter building codes. Rarely are commercial

buildings damaged by sinkholes, and it was suggested at

the Summit that this was due to the fact that


3These measurements should be done according to some
standard such as in conformance with the American Society of
Testing Materials (ASTM).


V-17








commercial buildings are designed and engineered to

much stricter standards. It was noted that the

Southern Building Code Congress International, Inc. has

promulgated a "deemed to comply" standard which would

reduce the number of false sinkhole claims and possibly

stabilize homes which are affected by sinkholes.

Conformance with this "deemed to comply" standard would

also mitigate damage caused by other perils such as

windstorm damage from hurricanes. The preface and

purpose of the "deemed to comply" standard can be found

in Appendix V-B.

9. Soil tests are not required in all counties which are

likely to have shrink/swell clay.4 Requirement of

soil tests in these counties would reduce the incidence

of damage to homes which masquerades as sinkhole

damage. If shrink/swell clay is present on the

footprint of the building, more expensive foundation

design can be used to secure the home against damage by

shrink/swell clay. A post-tension slab foundation can

be poured at a cost of about $2,000-$3,000. In some

instances, the seller of the lot will adjust the

purchase price of the lot for the increased cost of the

foundation.


4Shrink/swell clay is also known locally as pipe clay or
Fuller's Earth, and in technical scientific terms is often a
mixture of polygorskite and other clays such as illite or
chlorite. Any mixture of clay minerals that can absorb large
amounts of water can be called a shrink/swell clay.
V-18








10. A recommended decision process suggested by one

participant and described through a flowchart and the

form used by one participating geotechnical firm can be

found in Appendix V-C.


Prompt and Fair Settlement of the Claim

The second component of "minimum standards" is prompt and

fair settlement of the claim, given clear determination that an

insured event has occurred. It has been asserted by homeowners

in the Dunedin area that the techniques currently employed to

repair homes damaged by a sinkhole do not work; after the repair,

the homes continue to crack. This is the reason for their

request that damage in amounts greater than fifty percent (50%)

of the pre-damage value of the home be compensated through a cash

settlement and that no effort be made to fundamentally repair the

home.

In an effort to establish the validity of the homeowners'

claim that the current sinkhole repair techniques are not

effective, a phone survey of residents in the Dunedin area, who

had experienced sinkhole damage and received some compensation

for this damage from insurance companies, was undertaken.

Identification of these homeowners came from the aforementioned

mail survey done by the Florida Department of Insurance (DOI).

Out of the 8,500 surveys mailed by the DOI, 140 responded

that they had suffered sinkhole damage. Of these 140 homeowners,

41 said they had received some payment to repair damage from

their insurance company. Attempts were made to contact these 41

V-19








people, and 32 were successfully contacted. The results of this

phone survey follow.


SINKHOLE GROUTING SURVEY SUMMARY

1) It is our understanding that you have had the damage to your
property diagnosed as being caused by a sinkhole. Is this
true?5


24 Yes


8 No


2) Was your house repaired by an engineering firm?6


18 Yes


6 No


3) How much did the repairs cost?7


Range


Average


$7,800 $88.000

$49,500


(sixteen replied/two did not know)


4) What repairs were made to your house?


Grouting only

Grouting with pilings

Pilings only


8

8

2


STwo homeowners' insurers diagnosed the property damage as
being caused by clay shrinkage, yet settled with the insureds for
$130,000 and $51,000.

6Several homeowners whqse houses were diagnosed as being
damaged by sinkholes settled with their insurers for the
replacement cost of their houses and elected not to have repairs
made.


7One homeowner's insurer paid for grouting and cosmetic
repairs to the house ($25,000 total) although the insurer
diagnosed the property damage as being caused by clay shrinkage.
The same homeowner also reported subsequent damage.


V-20








5) Have you had subsequent damage?

Yes 7

No 9

Under review __

Do not know 1


6) Have you had subsequent damage?

Grouting Only Grouting W/ Pilings Pilings Only
Under Do Not
Yes No Review Yes No Yes No Know

3 4 1 4 4 1 0 1


7) Do you currently have a homeowners insurance policy?

Yes 30

No 2


8) Have you had problems getting insurance?

Yes 11

No 21


9) What kind of coverage do you have?

Homeowners 23

Contents/Liability only 5

Forced-placed coverage 1

Dwelling excluding sinkhole l
with contents/liability

None 2


V-21








10) How much do you pay for your homeowners insurance?

Homeowners range $135 $520 average $254

C/L only range $261 $1.000 average $665

Forced-placed coverage average $500

Dwelling excluding average $800
sinkhole with C/L

*Summary statistics are based on 32 completed surveys from a
sample of 41.


This survey admittedly had a very small sample. Thus

results are not conclusive, but they do give "ballpark" findings.

From this survey, approximately forty-four percent (44%) of the

homeowners who had some kind of repair done to their homes had

subsequent damage. As far as which particular technique was more

effective (i.e., grouting only, grouting with pilings, or pilings

only), casual observation of these numbers reveals that

subsequent damage problems are evenly distributed across the

techniques.

The reasons for this subsequent damage could be any of the

four following reasons:

1. the initial diagnosis of the cause was incorrect;

2. the application of the technique was done incorrectly;

3. even though the diagnosis may be correct and the

technique may have been performed correctly, the

technique is ineffective; or,

4. the technique could have been effective and a separate

cause of damage has subsequently developed.


V-22








From this small survey, we have no ability to judge which of the

above reasons might explain why subsequent damage occurred.

SUMMARY

The current practice of insurers is consistent with the

adjustment of other types of loss. However, one unique feature

of the adjustment of sinkhole claims is that there is a great

deal of reliance upon and deference to the opinions of the

professional geologist or engineer utilized in the examination of

the site. The result of the Sinkhole Summit indicated that there

is no uniform set of criteria that can be universally applied to

the investigation of sinkhole claims. Rather, the determination

of the cause of loss is very site specific and requires an

evaluation by highly trained individuals who possess great

expertise. It was recommended that a list of guidelines be

compiled. This list of guidelines relies heavily on the

professional judgment of the geotechnical expert in its

application. If the expert decides not to pursue an item on this

checklist, the rationale should be noted in the report. Specific

minimum guideline recommendations included a description of pre-

site, on-site, and detailed site assessment issues which should

be addressed (see pp. V-ll to V-17). Furthermore, it was highly

recommended that

1. soil tests be required in areas of the state with a

known presence of shrink/swell clay;


V-23








2. building codes be improved to conform with the Southern

Building Code Congress International (SBCCI) "deemed to

comply" standard and be enforced; and

3. the results of the geotechnical investigation be given

to the homeowners in layman's terms.

Because of the unique nature of sinkhole losses and the

necessity for an ad hoc evaluation of losses, as well as an

expert's evaluation of what testing standards are appropriate in

a given instance, a procedure which would centralize evaluation

and utilize highly trained, highly competent professionals who

would uniformly approach the problem seems desirable.

With regard to the effectiveness of the current efforts to

repair damage, the results of a phone survey of thirty-two

homeowners who had sinkhole damage repaired through the use of

one of the three methods described indicated approximately forty-

four percent (44%) experienced subsequent damage. The findings

of this small sample survey suggest that current repair methods

are somewhat unreliable. Further specialized investigation of

this expensive repair process is required to explain why

subsequent damages occurred.


V-24





























VI. NEED FOR AN ONGOING RESEARCH RESOURCE







INTRODUCTION

The ability to explain and predict geologic phenomena is

clearly enhanced by the availability of accurate data collected

on a long-term basis. The issue with respect to sinkhole-related

information is not, therefore, if it would be useful. Rather,

the appropriate question is whether such data is or could be

generated from current sources, or if the establishment of an

ongoing research resource is needed. This question is not a new

one, having been addressed nearly ten years ago prior to the

formation of the Florida Sinkhole Research Institute (FSRI).

Much of the discussion at that time is relevant today and is

summarized below, along with a brief history of the FSRI. In

addition, the current need for the proposed research resource is

addressed. This section concludes with a discussion of three

proposals for the establishment of a new sinkhole research

center.


HISTORICAL DEVELOPMENT

The rapid growth in population and the development of

previously rural land in Florida from the 1960's to the present

time has resulted in a corresponding increase in property damage

from sinkholes. The increase in population not only makes it

more likely that sinkhole activity will be reported, but also may

affect the incidence of sinkholes through its impact on the

groundwater supply. At the same time, the construction of both

residential and commercial buildings to service the needs of the


VI-1








expanding population base makes it more probable that a sinkhole

will actually result in property damage.

In 1981, the damage and resulting insurance problems

associated with the 320-foot diameter Winter Park sinkhole led

then-Insurance Commissioner Bill Gunter to recommend the

establishment of a Sinkhole Research Institute. Proposals for

the Institute were solicited by the University System

Chancellor's Office, with five universities expressing an initial

interest (Florida Atlantic University, Florida State University,

the University of Central Florida, the University of Florida, and

the University of South Florida). The University of Central

Florida was eventually selected to house the Institute because of

its proximity to both significant sinkhole activity and to

geotechnical engineering firms that were considered to be the

most active in sinkhole-related work.' The operating guidelines

for the Institute were developed by an Advisory Board made up of

representatives of a variety of groups concerned with sinkhole

problems.2 The Florida Sinkhole Research Institute was


'The source of this information is a draft of the Proposal
for the Establishment of Institutes or Centers, submitted by the
University of Central Florida (April 20, 1982). This document is
found at Appendix VI-A.

ZThe initial Advisory Board was appointed by Commissioner
Gunter and included representatives of: all five participating
universities and the Board of Regents; the insurance and
construction industries; title companies, mortgage bankers, and
real estate brokers; private geotechnical engineers,
geophysicists, and land surveyors; the U.S. Geological Survey and
state water management district hydrologists; Florida Departments
of Insurance and Treasurer, of Natural Resources, and of
Transportation; county planning, zoning and public safety
commissions; and municipal officials.

VI-2








officially founded in 1982 at the University of Central Florida

by a cooperative agreement between the Institute Advisory Board

and UCF President Trevor Colbourn. At that time, all sinkhole

data files of the Florida Geological Survey (FGS) were

transferred to the FSRI for use in their program.

The purposes of the Florida Sinkhole Research Institute, as

stated in their literature, are summarized as follows:

1. to centralize and coordinate technical data and
information on sinkholes in Florida;

2. to conduct research into the causes, mechanisms,
location, engineering, and repair of sinkholes; and

3. to provide public information and education about the
sinkhole hazard in Florida.

The initial funding of $150,000 for the FSRI was provided by

contributions from insurance companies doing business in the

state of Florida. Apart from the use of the facilities at the

University of Central Florida, the primary source of subsequent

funding was external research grants. Because of an inability to

generate additional funds from either private or public sources,

the Institute was phased out of existence over the course of the

past year. The staff was released in August, 1991, and the FSRI

was officially disbanded with the expiration of the Director's

contract in August of 1992. Portions of the data collected by

the Institute have been deposited in part with the Florida

Geological Survey and in part with the Southwest Florida Water

Management District.


VI-3








THE NEED FOR AN ONGOING RESEARCH RESOURCE

In order to determine whether an ongoing sinkhole research

resource is considered to be necessary, the following parties

were asked to assess both the need for such a facility and (if

interested) their own capability in housing the research center:

the Florida Geological Survey, Florida State University, the

University of Central Florida, the University of Florida, and the

University of South Florida (the request and responses are found

at Appendix VI-B). In general, these entities were selected

because they met the criteria of being academic institutions with

established geology departments, and the letters were addressed

to the chairperson of the geology department. The exception is

the University of Central Florida, which has no geology

department but was included because of its former association

with the Florida Sinkhole Research Institute. (The letter in

that case was sent to the former Director of the FSRI.)

In addition to surveying the universities and the Florida

Geological Survey, the rationale for the establishment of the

FSRI was reviewed. It is clear that at the time it was formed,

there was a perceived need for the Institute. Although it

encountered funding difficulties which resulted in its limited

success and eventual termination, this does not necessarily mean

that the need for the facility was not real.

The respondents were unanimous in their belief that an

ongoing research resource is needed. A variety of reasons were



VI-4








offered which, together with the rationale for the FSRI, can be

categorized and summarized as follows:

1. IDENTIFICATION AND EXPLANATION OF SINKHOLE ACTIVITY:

Each of the respondents emphasized the importance of a

systematic database (collected continuously over a long

period of time) in identifying areas of sinkhole

activity and in developing an understanding of the

processes and trends responsible for the development of

sinkholes. The need for an ongoing (i.e., long-term)

research center as opposed to a short-run effort was

cited in light of the fact that (1) the formation of

sinkholes results from long-term processes that must be

studied over time, and (2) the development of new

technologies over time may lead to additional

information that can be integrated into the existing

body of knowledge to form a more complete understanding

of these processes. It is also argued that the

identification and explanation of sinkhole activity will

provide a better assessment of risk that is needed for

establishing appropriate insurance rates, setting

building construction and design standards, and planning

land use.

2. PREDICTION OF FUTURE SINKHOLE ACTIVITY: In addition to

identifying and explaining the formation of existing

sinkholes, the continuous collection of data and the

mapping of indicators of future sinkhole locations


VI-5








should prove useful in identifying specific areas of

potential sinkhole development and in predicting the

effects of changes in land and/or water use. These

predictions would also have important implications for

insurance rating, construction standards, and land-use

planning.

3. CENTRALIZATION AND COORDINATION OF TECHNICAL DATA: The

point was made in the UCF proposal for establishing the

FSRI that the number and variety of agents and

businesses involved in sinkhole-related activities

slowed the process of compiling, analyzing, and

disseminating information. The research center is

needed, therefore, to act as a liaison between these

groups and to coordinate their activities.

4. DISSEMINATION OF INFORMATION TO THE PUBLIC: Several of

the respondents indicated that the research resource is

needed to provide information to the public and to

interested researchers. The potential for using the

center as a means of educating the public about the

sinkhole hazard in Florida is a common theme.

In general, the observations of the surveyed entities

regarding the need for the research center correspond to the

opinions expressed by the geologists and geotechnical engineers

whomet on the Florida State University campus in August. There

is a definite consensus among this group that such a facility is

needed.


VI-6







PROPOSALS FOR THE ONGOING RESEARCH RESOURCE

The universities mentioned above, along with the Florida

Geological Survey, were also asked (1) to indicate whether or not

they would be interested in serving as the research resource

center, and (2) if so, to evaluate their own ability and

attributes, the quality and adequacy of their facilities, and the

expected costs of doing so. The Chairman of the Geology

Department at Florida State University indicated that, in his

opinion, the "rational" choice for the research center would be

the Florida Geological Survey. (His reasons are incorporated

into the assessment of the FGS given below.) The University of

Florida, the University of South Florida, and the Florida

Geological Survey provided brief proposals and cost estimates,

the details of which are outlined below.

1. THE UNIVERSITY OF FLORIDA (UF): The University of

Florida proposal cited its strong programs in geology,

civil engineering, and environmental engineering, as

well as the presence of faculty involved in sinkhole

research. The Department of Geology has some experience

in operating research institutes, as it already

administers a Board of Regents Type IV Institute for

Environmental Studies. UF claims a record of success in

supplementing state funds with private funding, and is

close in proximity to the geographic areas where

sinkholes are most prevalent.


VI-7







Costs are expected to depend on the desired scope

and breadth of the program. The funding required for a

"modest but effective! program are estimated as follows:

Personnel: Summer salary for director of the center = $ 20,000
Part-time secretary (for one year) = $ 10,000
Student research assistant
(1/2 time for one year) = $ 6,000
Other Needs: Equipment, supplies, and space needs
could be developed as the research
center grows.
Total Cost: = $ 36,000


2. THE FLORIDA GEOLOGICAL SURVEY (FGS): The FGS cites two

main reasons why it should be selected to house the

sinkhole research resource center. The FGS is the only

governmental agency with a statutory mandate to maintain

and interpret geologic data from throughout the state.

And secondly, its history in collecting sinkhole data,

all of which was turned over to the FSRI at the time of

its creation, suggests the FGS has the experience and

expertise to do the job. Long-term continuity and staff

expertise are also stressed. The staff of the FGS

includes fifteen Florida licensed professional

geologists with 185 collective years of experience and

an established administrative support staff.

The sinkhole research center would be incorporated

into the FGS's current facilities, which include: a

research library; laboratories; computer capabilities; a

core and well cuttings repository; a geophysical


VI-8








wireline log library; and a geologic descriptions record

file. In addition, the FGS shares a variety of

equipment with the Florida State University Geology

Department.

The FGS emphasizes that it has worked with all

universities throughout the state of Florida and, where

appropriate, will continue to do so. This gives it

access to expertise and resources from a variety of

sources while maintaining a central repository for the

research.

The funding estimates for the FGS are summarized

below:


Personnel: One Professional Geologist
Supervisor = $ 52,600
Two Geologists* = $ 60,000
One Secretary = $ 17,500
('Includes salary & state benefits package)

Other Needs: Expenses for these Positions (field
expenses, auto maintenance, printing,
and standard state budget package) = $ 43,000
OCO (one field vehicle)
(standard state budget package) = $ 31,750
Total Cost: = $204,850


3. THE UNIVERSITY OF SOUTH FLORIDA (USF): While this

proposal indicates that a stand-alone resource center at

the University of South Florida is a viable alternative,

it suggests that a better arrangement would involve a

sharing of responsibilities between the Florida

Geological Survey and USF. The center, as it is


VI-9








envisioned in this proposal, would be active in two

major areas--service and research. The service

component, which consists of the use of the center for

collecting and disseminating sinkhole information, would

be the responsibility of the FGS. The University of

South Florida would then (subject to approval) oversee a

program of applied sinkhole research, using the

technical information gathered by the resource center.

The rationale for this arrangement is one of

experience and expertise. Currently, there is a

pressing need for sinkhole-related information on the

part of homeowners, insurers, agencies, and local

governments. Given its statutory mandate and long

history of collecting and maintaining such data, USF

feels the FGS is the logical choice for doing so under

the proposed research facility. While this service

function could be carried out at the university level,

the primary activities of a university are teaching and

research. It therefore makes more sense (USF argues) to

divide the duties among the FGS and USF according to

their areas of expertise.

The USF proposal also stresses the need for

ongoing funding from the state, as opposed to the

reliance on outside funding which contributed to the

demise of the Florida Sinkhole Research Institute.



VI-10








Personnel and funding requirements are estimated as

follows:


SERVICE-RELATED REQUIREMENTS
Personnel: One Administrator
One or two Professional Staff Members
One Administrative Assistant

Other Needs: Vehicle and Travel Budget
Total Cost: = $150,000 to $200,000

RESEARCH-RELATED REQUIREMENTS

Personnel: One Part-Time Research Director
One Part-Time Fiscal/Administrative Assistant

Other Needs: None specified
Total Cost: = $60,000 to $120,000



SUMMARY

There is general agreement among the geologists, engineers,

and academic institutions surveyed that there is a need for an

ongoing facility to collect and disseminate sinkhole information

and to conduct research on the formation and occurrence of

sinkholes. The increase in sinkhole activity and the resulting

difficulties it has created for homeowners, insurers, agencies,

and local governments has highlighted the importance of

identifying, explaining, and predicting sinkhole occurrences and

related phenomena. It has also led to a broad-based interest in

the information that would be collected by such a resource

center. At the same time, the demise of the Florida Sinkhole

Research Institute has already resulted in the decentralization


VI-11








of the existing sinkhole database and a lack of coordination

among the activities of these interested parties.

There is a consensus among the responses and proposals

submitted to the research team that the Florida Geological Survey

should play a central role in the development and maintenance of

a sinkhole database. In addition to its own proposal, the

responses from both Florida State University and the University

of South Florida indicate that the FGS should be used as the

central clearinghouse for the collection of sinkhole data and for

its dissemination to the public. It has considerable experience

in fulfilling this role, as well as established facilities and

personnel in both the geological and administrative support staff

areas.

The role of the FGS relative to that of the universities in

overseeing sinkhole research activities is not as well-defined.

Each of the proposals outlines the research expertise and

resources of the respondents, all of which should be utilized

when appropriate. As the central repository for the data, the

FGS must continue to work with the universities (and the

reinsurance facility, if established) to coordinate the research

into sinkhole occurrences and formation.

Finally, the respondents agree that the demise of the

Florida Sinkhole Research Institute was due in large part to a

lack of continuing funding. The former director of the FSRI

indicated that he had requested $200,000 as the annual budget for

the center. This amount corresponds roughly to the totals


VI-12








specified in the current proposals (approximately $205,000 for

the FGS proposal and a range of $210,000 to $320,000 for the USF

proposal). The research center must, it is agreed, be able to

survive on this budget without relying on externally-generated

funding.


VI-13