Florida sinkholes cause concern among homeowners

With the recent sinkhole in Jonesville, Florida many Alachua county homeowners are questioning their insurance coverage. Although all homeowners insurance policies have Catastrophic Ground Cover Collapse coverage, not all policies include sinkhole coverage.

In order for a home to be covered under catastrophic ground collapse there must be structural damage to the building (including the foundation) and the structure must be categorized as “condemned;” additionally, the insured structure must be vacated by the governmental agency authorized by law.  Catastrophic ground collapse is defined as geographical activity that results in the abrupt collapse of the ground cover or a depression in the ground cover clearly visible to the untrained eye. Structural damage such as settling or cracking of the foundation or building does not constitute a catastrophic ground collapse loss. If the building was considered condemned and therefore catastrophic ground collapse coverage did apply, “contents coverage” would be applied; however, it is rare that catastrophic ground collapse coverage applies due to all the requirements.

Many homeowners insurance policies no longer include sinkhole coverage. In fact, only a limited amount of insurance companies offer this coverage for new policies, and of those that do some have a higher deductible. Although some companies may not include sinkhole on new policies, if your current policy includes sinkhole coverage and you renew your policy, some companies “grandfather” you in. Coverage for sinkhole loss does not have to meet the requirements of catastrophic ground collapse coverage. A building does not have to be condemned or deemed uninhabitable in order for sinkhole coverage to apply. Structural damage caused by cracking of the foundation or building would be covered if caused by sinkhole activity. A “sinkhole” is defined as a landform created by subsidence of soil, sediment or rock as underlying strata are dissolved by ground water.

It is advised that homeowners review their insurance policies to determine whether sinkhole coverage is included, and to contact their insurance agent if they have questions regarding their coverage. We advise you to ask your insurance agent the following three questions:  (1) Does my homeowners insurance policy include sinkhole coverage? It is important that you confirm that sinkhole is included in addition to catastrophic ground collapse, as we previously mentioned catastrophic ground collapse is included on all homeowners policies, but sinkhole is not. (2) If your policy does have sinkhole, what is the deductible for this coverage? (3) If your policy does not have sinkhole coverage, ask your agent if you can buy it back.