Sinkhole vs. Catastrophic Ground Collapse in Florida Home Insurance
Hurricanes aren't the only risk you need to worry about when it comes to homeowners insurance in Florida. More than 6,500 Florida sinkhole insurance claims happen each year.
According to the US Geological Survey, an estimated 35-40% of the US is at risk of sinkholes. In addition to Florida, I'm looking at you, Kentucky, Tennessee, Missouri, and Texas.
The good news is you can protect yourself with the proper homeowners insurance, though you will need to do some extra work to understand how to get coverage. Most homeowners policies will NOT provide coverage for sinkholes or catastrophic ground cover collapse by default. However, there are add-ons to the plan that allows you to get protection from this type of natural disaster. While the two terms sound similar, they mean different things. So having coverage for catastrophic ground cover collapse does not mean you have coverage for a sinkhole.
Florida law requires carriers to offer coverage for catastrophic ground cover collapse, defined as geological activity that results in ALL of the following (so all four conditions MUST be satisfied):
- The abrupt collapse of the ground cover
- A depression in the ground cover clearly visible to the naked eye
- Structural damage to the building including the foundation
- The insured's structure is condemned and ordered to be vacated by the government agency authorized by law to issue such an order for that structure
Florida law defines sinkholes as:
- A landform created when the subsistence of soil, sediment, or rock as underlying strata becomes dissolved by groundwater
Note that sinkhole coverage is far broader, so it is better coverage if you have a choice. There are scenarios where ground cover collapse coverage will not cover damage from a sinkhole if all four points above are not satisfied. For example, if a sinkhole causes foundational cracks in your home, but your home is still livable, your insurance will not pay for the damages if you only have ground cover collapse coverage.
Before buying a home, ask the inspector to check for signs of sinkhole activity. If the risk is high, you may have a hard time finding affordable home insurance.
Check your homeowners insurance quotes with sinkhole coverage here:
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