Last legislative session, Banking & Insurance Chairman Garrett Richter, R-Naples, introduced a bill to address what he called "frivolous sinkhole claims," reported the Florida Insurance Council (FIC). Much of the problem is in what is known as "sinkhole alley"–Pasco and Hernando counties–but the issue is spreading in large part to abuse by public adjusters and attorneys, the industry has alleged.

Rising expenses from questionable sinkhole claims, including legal fees and costs for geological and engineering studies, have been identified by insurers and Commissioner McCarty as a reason many insurers have reported underwriting losses, the FIC said.

In an attempt not to overwhelm this year's omnibus property insurance bill with reform, insurers gave up on provisions to address sinkhole claims. The omnibus reform package was vetoed by Gov. Charlie Crist anyway.

Signs of the expense related to sinkhole claims have surfaced in insurers' rate filings. A file by the state-run Citizens Property Insurance Corp. indicated it factored sinkhole losses into its request for a homeowners rate hike.

Increasing rates led to legislation in 2009 that took effect this year. Homeowners in Pasco and Hernando counties now have the option to continue comprehensive sinkhole coverage as part of their property policies.

In his blog, attorney William "Chip" Merlin said that a sinkhole problem exists for insurers in Florida because it is a natural problem in the state. The problem is not fueled by attorneys, he said.