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Florida Sinkhole vs. Catastrophic Ground Collapse Coverage - FL Insurance Policies

Sinkholes can cause major damage to properties in Florida. In 1981, in Winter Park, Florida a sinkhole opened up and swallowed a house and several nearby businesses. On June 27, 2011 a sinkhole swallowed part of a beauty salon in Leesburg, Florida. In fact, Florida has more sinkholes than any other state in the nation.

Sinkhole coverage has been part of most home and business insurance policies until 2011-2012. Before this, there had been a large number of claims being filed on homeowners insurance policies in Florida, particularly from Hernando, Citrus, and Pasco Counties. Many claims made under these policies resulted in houses being declared a total loss when there has been little to no damage visible damage to the home.

in 2011, Florida insurance law changed and  clarified the insurance definition of a sinkhole vs Catastrophic Ground Cover Collapse.

The law requires insurance companies to cover "catastrophic ground cover collapse," but damage caused by "sinkholes" may no longer be covered by your policy.

What is Catastrophic Ground Cover Collapse Coverage?

Catastrophic Ground Cover collapse is a sub-type of sinkhole, and when the news media covers sinkhole damage it is usually a catastrophic ground cover collapse.  It is a major sinkhole that has a very specific legal guidelines. Florida law defines a catastrophic ground cover collapse as a geological activity that results in ALL of the following:

  • The abrupt collapse of the ground cover
  • A depression in the ground 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.

Under this definition, the damage caused by the 1981 Winter Park sinkhole or the 2011 Leesburg sinkhole would be covered under a homeowners insurance policy. The damages met all 4 criteria above.

 Your homeowners policy will always cover catastrophic ground cover collapse events (a small sub-section of sinkholes).. Your standard homeowners deductible would apply.

What is Sinkhole Coverage?

There are many types of sinkholes that damage homes, but do not meet all 4 criteria above.   With the law change, the majority of the homes damaged by a sinkhole will not meet this “ 4 prong collapse” definition.  Read your insurance policies carefully. 

 It is now possible for your home to be damaged by a sinkhole, but  not covered.   For example,  let's say a sinkhole causes cracks in your walls, but there is not a depression in the ground, and your home was not condemned.  In this example, your home was damaged by a "sinkhole"  but not a "catastrophic ground cover collapse."  The insurance company would not pay if you only had the standard "catastrophic ground cover collapse."  However, if you had purchased and paid extra for "sinkhole coverage," the insurance company would pay to repair the damages.

How to Get Sinkhole Insurance on a Homeowners Insurance Policy in Florida

All insurance companies licensed to do business in Florida automatically include catastrophic ground collapse coverage  in homeowners policies at no additional cost.   

But, don't assume your policy has sinkhole coverage.  While all insurance companies must offer sinkhole coverage also, it comes at an extra cost. . Sinkhole coverage is usually as a addendum or rider to the homeowners policy with an additional charge to add sinkhole coverage on the policy. You will need to request your insurance company add coverage for sinkholes in Florida.  

The cost of the sinkhole rider will vary in different areas of the state. For example in North Florida it may be as low as $50, while in in Central Florida run $300, and sinkhole alley (Polk, Hernando, Pasco, Citrus Counties) it can be $500+ to add this coverage.

What is a Sinkhole Inspection?

Most insurance companies before adding coverage for sinkholes will require an inspection from an approved inspection company that shows no existing damage. The insurance company will require certain inspection companies to be used and will usually split the cost of the inspection with you 50/50. The typical cost of inspection that a client will pay is $70 in Florida. When the inspection company comes to your house, the will be looking for any cracks to the building, foundation, or driveway. If the inspection company finds any cracks, the report sent to the insurance company will note this. The presence of any cracks at the house (whether caused by sinkhole or not) will likely prevent your home from being able to get approved to add the sinkhole rider. 

If you are buying a home, be sure that the house is insurable for sinkholes if this a concern to you. When you have the new home inspected, be sure to ask if the inspection will address any possible sinkhole activity, like cracks in the walls or foundations.

How many sinkholes are near me in Florida?

University of South Florida has a map program that will show how many sinkholes have been reported by each county in Florida. The maps are available by clicking here. Sinkholes are rarer in North and South Florida. Sinkholes occur much more often in Western and Central Florida. They are particularly common in Pasco, Hernando, Citrus, Marion, Seminole, Polk, and Lake Counties.

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