sinkhole vs. catastrophic ground collapse coverage

Just as Florida law requires insurers to offer flood insurance, carriers are required to offer catastrophic ground cover collapse but it may leave you footing the bill if you do not have sinkhole coverage. Confused? Many homeowners feel the same. The differences in sinkhole vs. catastrophic ground collapse coverage vary when you consider the definition under the law. We’ll explain below.

What’s the difference between sinkhole vs. catastrophic ground collapse coverage?

Since Florida experiences a high frequency of sinkholes than the rest of the U.S., you would think the definition of sinkhole vs. catastrophic ground collapse coverage would be the same and included under a single type of coverage but that’s not the case.

Catastrophic ground cover collapse is defined as a geological activity that results in the following:

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

If your home incurs damage from a sinkhole but doesn’t meet the criteria above, your insurance company may not cover the damage under the catastrophic ground collapse coverage. Additionally, unless insured, surrounding homes won’t be covered if affected by the sinkhole activity under a nearby structure.

If you have additional sinkhole-specific coverage, then your expenses are covered under your policy. Insurance companies are required to offer supplementary sinkhole coverage but typically offer it as a rider or addendum at an additional cost.

Under the law, if any disagreements occur, insurers are required to notify you of your option to participate in the Florida Department of Financial Services’ Sinkhole Neutral Evaluation Program.

Before buying a home

In addition to other issues sellers try to hide from buyers, sinkhole activity is something that is easy to hide if you’re not looking and it’s a legitimate concern to be aware of before you purchase a home. It’s critical to hire a home inspector, who can identify any noticeable sinkhole activity signs and will assess the property for potential sinkhole risk. Don’t be afraid to ask neighbors if they’ve ever had any issues with sinkholes in the area or near their properties.

Finally, speak with an insurance agent to determine if the home can be insured with sinkhole coverage. Ensure it’s included in your homeowner’s insurance policy coverage or it can be added to it. Depending on the company, they may require sinkhole testing to determine if your property can be insured.

Regarding a sinkhole claim

First things first, if required, make sure your family safely evacuates. Your personal safety outweighs everything else. If you can safely remove your valuable items from the home, then do so. Don’t forget to clearly mark the area to warn others of the sinkhole. Not only do you want to keep everyone safe but you want to avoid being held liable for any injuries.

Contact your insurance company and local building inspection department to make them aware of the situation. Your insurance company will make arrangements for geological testing to determine the root cause. If it meets the above criteria, then your insurance company should pay for the cost of damage. For questions regarding sinkhole vs. catastrophic ground collapse coverage, contact your independent insurance agents at E&L Insurance.