Barclays Public Adjusters

Does Homeowner’s Insurance Cover Sinkholes?

Insurance Claim Professionals

In Florida, insurance companies are required by law to offer sinkhole coverage known as “catastrophic ground cover collapse.” The endorsements can be quite expensive and have high deductibles. Insurers can decline to provide the coverage if geological testing detects sinkhole activity on the property or within a certain distance of the home.

Individuals will have to decide for themselves if the coverage is worth the benefit. The cost of coverage for sinkholes can range from $2,000 to $4,000 or more per year. A sinkhole can cause $100,000 or more in damage. However, homeowners can pay for years and never need the coverage. Some areas are more prone to develop a sinkhole than other locations.

Sinkholes are a common feature of the Florida environment. Florida has the highest number of sinkholes than any other state in the U.S. due to a bedrock that’s primarily composed of limestone. The mineral is soluble and easily eroded by water from rainstorms, along with underground springs and streams. Geology experts say natural sinkholes in South Florida are relatively rare and those that do occur are typically manmade, as in water main breaks.

Homeowners will usually observe early signs that their home is at risk and setting on a potential sinkhole. Cracks can appear in walls, ceilings or foundations. Unexplained depressions often appear in lawns and homes may demonstrate sinking. It can be helpful to hire a home inspector that can identify signs of sinkhole activity.

A common phrase in the insurance industry is “Act of God.” It enables insurance companies to exclude a wide variety of claims including sinkholes and landslides, along with fires started by lightning strikes. Read policies carefully.

Homeowners who experience signs or symptoms of a sinkhole should gather essential documents and valuables if it’s safe to do so before evacuating. Notify the insurance company, city officials, and have a barrier erected around the property to prevent entry – property owners can be held liable for any injuries incurred by others.

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