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Sinkhole coverage vs. catastrophic ground collapse

Sinkhole Coverage vs. Catastrophic Ground Collapse

Florida is famous for many threats—hurricanes, alligators, the eponymous “Florida Man”—but one of its most dangerous features lurks right underground: sinkholes. Which begs the question: “How does this affect my insurance?”

Your Florida homeowner’s policy includes catastrophic ground cover collapse, but is that the same as sinkhole insurance? In this article, we’ll compare sinkhole coverage vs. catastrophic ground collapse to see how the two measure up.

What Are Sinkholes?

If you’ve just moved to Florida, you might not be familiar with these geological disasters. Unfortunately, they are just another part of life here in the Sunshine State.

A sinkhole is a depression in the ground caused by the collapse of the underlying structure. Florida sits on limestone, a type of porous rock that succumbs very easily to water erosion. When water seeps into the ground (as happens often during our many summer thunderstorms), the slightly acidic water begins to dissolve the limestone.

As more cracks develop, the surface area of the limestone increases and more water sweeps in to dissolve it. After enough time passes, the existing limestone is not strong enough to hold up the ground above it and it collapses.

This is only one way that sinkholes can form. Drought, drilling for wells, excessive withdrawing of groundwater, and other factors can make sinkhole activity more likely.

Some sinkholes are barely enough to damage your child’s playhouse, but others can be large enough to swallow an entire apartment building. They can occur gradually or suddenly and the repairing the damage caused can cost hundreds of thousands of dollars.

sinkhole in front of Florida house

Sinkhole Warning Signs

Unfortunately, there is nothing you can do to prevent a sinkhole from opening up on your property. However, you can be on the lookout for warning signs so you can prevent further, more catastrophic, damage.

Some warning signs of a developing sinkhole are:

  • cracks or fissures in the foundation;
  • slanted doors and windows that won’t close properly;
  • drooping vegetation; and
  • cracks, pools, or holes in the ground.

If you notice any of these red flags on your property, contact a specialist immediately to confirm your suspicions. Depending on what is happening beneath your home, certain preventative measures can be taken to keep your family safe.

 

Does My Homeowner’s Insurance Policy Cover Sinkholes?

With so much at stake (and so much sinkhole activity in the state), you’re probably wondering if sinkholes fall under the umbrella of your insurance coverage.

The answer? Sometimes.

As of 2007, all home insurance policies in Florida must include something called “catastrophic ground cover collapse coverage,” which includes some—but not all—sinkholes. To comprehensively cover sinkhole damage, you would have to purchase a sinkhole insurance rider at an additional cost (more on this later).

 

Sinkhole Coverage vs. Catastrophic Ground Collapse

The two terms sound interchangeable, but there are big differences when examining sinkhole coverage vs. catastrophic ground collapse.

As with most insurance policy complaints, rampant fraud and abuse of the system have led insurance companies to recognize a distinction between sinkhole insurance and catastrophic ground cover collapse coverage.

sign reading "Danger Sinkhole"

Let’s take a look at the major differences when comparing sinkhole coverage vs. catastrophic ground collapse.

Catastrophic Ground Cover Collapse

Catastrophic ground cover collapse coverage is included under your existing home insurance policy.

However, your claim must meet four requirements before your insurance company will reimburse you for the loss:

  1. The abrupt collapse of the ground cover;
  2. A depression in the ground cover clearly visible to the naked eye;
  3. Structural damage to the insured building, including the foundation; and
  4. The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

Again, all four of these conditions must be met for it to be considered catastrophic ground collapse. Incidents that meet only some of these conditions would require a sinkhole insurance policy.

Sinkhole Insurance

A sinkhole insurance policy covers structural damage to the insured building, including the foundation, caused by sinkhole activity. A “sinkhole” is defined as “settlement or systematic weakening of the earth” resulting from “contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on a limestone or similar rock formation.”

Because sinkhole policies cover a greater number of claims, they are much more difficult to find. In fact, Florida sees so much sinkhole activity that many insurers simply do not issue this type of policy. The ones that do offer sinkhole insurance riders often apply deductibles of 10% (or more) of the value the insured home.

This increased deductible does not apply to catastrophic ground cover collapse coverage.

woman thinking on park bench

Do I Need Both?

When examining sinkhole coverage vs. catastrophic ground collapse, the differences between them are clear.

Sinkhole insurance is much broader than catastrophic ground cover collapse, making it much easier for crooks to abuse (causing premiums to sky rocket). Catastrophic ground cover collapse coverage doesn’t cover every sinkhole, but it does ensure that, in most cases where your home is directly over a major sinkhole, you are covered without a sky-high deductible.

As always, your best bet is to thoroughly read over your homeowners insurance policy so that you are clear on what situations are covered as well as any gaps in coverage.

If the insurance jargon is confusing, don’t fret! Contact your insurance agent or carrier to verify what types of sinkhole loss are covered under your policy.

 

Conclusion

The threat of sinkholes can be frightening. The good news is that they are relatively rare and most sinkholes occur in Hernando, Pasco, Hillsborough, and Pinellas counties. Here in Central Florida, alligators and hurricanes are a much bigger threat to personal property.

For some additional peace of mind, consider checking your address against the Florida Dept. of Environmental Protection’s Subsidence Incident Reports Map to see sinkholes that have occurred near you. If you live in an area with high sinkhole activity, it may be worth looking into additional sinkhole insurance.

And if you have questions about auto insurance, life insurance, renter’s insurance, or home insurance in general, contact our offices to learn more. We have two convenient locations and more than 30 years of experience in the Orlando insurance market.

We can’t wait to meet you!

About the Author

Jason Levine

Jason received a Masters of Science & Management in Risk Management & Insurance from Florida State University. He has been with Harry Levine Insurance for 9 years and handles the leadership of daily operations. He was the 2013-2014 Florida Association of Insurance Agents Young Agent Council's Agent of the Year. Currently serves on FAIA Board of Directors.

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