What exactly is a sinkhole and do I have coverage for it?

With sinkhole activity up all around the state of Florida and especially a few big ones in the news lately, many people are wondering what exactly a sinkhole is and if they have adequate coverage for the damage one could cause.

To first clarify what a sinkhole is – it is a depression, cavity or hole in the ground caused by some sort of collapse. Some believe these are a result of a soil issue, earth movement, nearby development, erosion, or running water such as a broken pipe underground. There are several things that can cause a sinkhole to open up and unfortunately, they can happen rather quickly and unexpectedly. Because there are not always indications or warnings, sinkholes can be very dangerous.

When there are symptoms of sinkhole activity, they typically include the following:

  • cracks in interior joint areas, windows or doors
  • cracks in exterior block or stucco
  • windows and doors become harder to close properly
  • depressions in your yard, other yards near you or the street
  • deep cracks and separation of paved concrete walks and drives
  • circular patches of wilting plants
  • sediment in your water
  • neighbors with confirmed sinkhole activity
  • observation of an actual cavity beginning to open

In order for a claim to be covered as a sinkhole loss, there must be “actual physical damage to the property covered arising out of or caused by sudden settlement or collapse of the earth supporting such property only when such settlements or collapse results from subterranean voids created by the action of water on a limestone or similar rock formation.” More simply stated, not all direct collapses from settlement problems fall within sinkhole coverage.

At this time, most home insurance companies in Florida do not provide sinkhole coverage unless you have an underwriting approved sinkhole inspection.

It is important to note that a sinkhole differs from catastrophic ground cover collapse. This coverage is almost always on home insurance policies in Florida. There are a few things to consider as somewhat of a rule-of-thumb when it comes to catastrophic ground cover collapse such as:

  • the abrupt collapse of the ground cover
  • a depression clearly visible to the naked eye
  • structural damage to the building including foundation
  • the structure being condemned or vacated by government authority or official

Because sinkhole activity has grown to be just about as common as hurricanes and water damage in Florida, it is very important for all home owners to understand what coverage their policy has and pursue endorsements and inspections as they see fit to protect their property and belongings from damage. If you ever suspect sinkhole activity, it is advised to secure the location from people and pets and then contact local authority and your insurance agent.

“What flood zone is my home in?”

This is such a common question we hear from home owners as well as realtors and mortgage lenders when it comes to property in Florida. Although it’s been proven that the majority of flood claims come from “low risk” flood zones (determined by FEMA), it’s still extremely important to know what level of risk you have for your home to potentially sustain flood damage.

There is a new tool called Flood Factor from First Street Foundation that can help determine the flood risk of a property just by entering the physical address. This tool can tell you approximately what percentage the chances are of your property being damaged by flood and what amount of flooding might occur. There are also projections up to 30 years into the future of how that could change over time. And if you’re interested, you can see some further statistics on your zip code, county and state within this tool as well.

This is beneficial in many ways but mostly to bring awareness to home owners of what their own situation is with regards to flooding and also what threats the surrounding areas may face. This also brings to light some gaps in the current FEMA mapping system, especially in smaller communities and rural areas. FEMA has reportedly only mapped one third of the nation’s riverine and coastal floodplains. That’s not nearly enough! But without an appropriate level of funding from Congress, that won’t be completed. This tool also helps with planning, identification of hazard mitigation opportunities, and conducting emergency response action plans.

One thing to note is that this tool is limited on how many details it knows about the property so it will not take into account things like community action, manual drainage systems put in place, etc.
It has been discovered that even just one inch of flooding can cause up to $27,000 of damage to your home so this isn’t something to take lightly. Most standard home owners and renters insurance policies do NOT cover flooding so it’s worth checking this out and seeing if you need a separate flood insurance policy. For more information on flood insurance or to obtain a quote, please contact us at (352) 371-7977 or info@mcgriffwilliams.com.

What exactly is Other Structures coverage?

Many people question the Other Structures coverage on their homeowner’s policy and don’t fully understand exactly what it is. It’s also referred to as Coverage B since it’s built into the core coverages on a standard HO-3 policy.

Other Structures applies to anything on the property that is not attached to the home itself. Examples of this would be:

• Fences
• Sheds
• Detached garages
• Gazebos
• Chicken coops
• Pump houses
• Pole barns
• Swimming pools (if not attached to the home)

However, there are often times exclusions for hurricane loss to the following if not attached to the dwelling (unless they are constructed with the same material as the main home):

• Awnings
• Aluminum framed screen enclosures/carports
• Solar panels
• Solar water heaters

A popular other structure in Florida, especially after everyone has stayed home more during the COVID-19 pandemic, is a swimming pool. If the pool is attached to the home (even by a connecting patio or screen enclosure), it would be covered under the Dwelling. Otherwise, it’s under Other Structures.

Typically, Other Structures coverage is 2% of the dwelling amount but it can be increased by endorsement with most companies to be sure you have enough. If you don’t have any detached structures on your property, you may question why you have this coverage at all. It is included as part of the policy without additional premium and cannot be fully excluded.

Be sure to evaluate these things on your property as sometimes they can be overlooked but also the things that commonly sustain damage in storms. If you have questions regarding what should be covered, at what value or under which coverage on your homeowner’s policy, we’d be happy to discuss it with you.

The Top 5 Things You Need To Know This Hurricane Season

1. Trim your trees! Branches hanging over or that could break off easily are a major threat in a storm. Check for any signs of trees being dead or weak as well. Heavy winds or the weight of rain water can make even healthy trees fall or drop limbs so keep all of the area around your house and fencing as clear as possible.

2. Understand your “Other Structures” coverage. This is the part of your homeowner’s insurance policy that covers things like fences, sheds, detached garages, gazebos, swimming pools (if not attached to the home), etc. Anything that is not attached to the home itself would fall under this category of coverage. However, there are often times exclusions for hurricane loss to awnings, aluminum framed screen enclosures/carports, solar panels, solar water heaters not attached to the dwelling unless it is constructed with the same material as the main home. Typically, Other Structures coverage is 2% of the dwelling amount but it can be increased by endorsement with most companies to be sure you have enough. Evaluate these things on your property as sometimes they can be overlooked but also the things that commonly sustain damage in storms. “Other Structures” may also be referred to as Coverage B on your policy.

3. What’s your hurricane deductible? There is a difference between your typical All Peril deductible and a hurricane deductible. When a named storm (or spinoff weather) causes damage, the hurricane deductible will apply. Usually, this deductible is 2%. It can go up to 10% and also some companies allow you to have it as low as $500. If your carrier does not offer lower than a 2% hurricane deductible, there are options for a separate hurricane deductible buy-down policy that can get your deductible all the way to $0 if you wish. At the most common 2%, a home insured for $100,000 would have a hurricane deductible of $2,000, which would be their out-of-pocket responsibility before coverage from the policy kicks in.

4. Water vs. Wind: there’s a difference! Typically, homeowner’s insurance policies cover damage caused by water but with very specific limitations. Examples of water damage that are usually covered would be a leaking roof or busted pipe. However, it generally does not cover damage from water that has seeped in or risen up from the ground. This would be covered by a separate flood policy, if there is one. If the home is not in a flood zone that requires flood insurance, the separate flood policy would be elective. Wind damage is typically covered by HO-3 policies for things like a fallen tree, lifted or missing shingles, broken windows from debris, etc. Wind driven rain can get confusing since it’s a mix of wind and water. Usually, damage from the water that comes in with wind driven rain is not covered but damage from the wind is.

5. Be prepared to document and mitigate. If you sustain damage from a storm, it is best to take as many photos or videos as possible to document before making any changes to the condition of your property. Then, it is your responsibility as a homeowner to mitigate your home and belongings from further damage. This could mean boarding up, putting out tarps, removing debris, or whatever needs to be done to prevent more damage from occurring. This is only recommended within what is safe for you and your family. If any temporary repairs need to be done before a claims adjuster can view the damage, all receipts or invoices should be saved as well as photos of before and after repair.

Hurricane season can be a stressful time but being prepared will help alleviate that and will also assist in the claims process, in the event of damage. As always, we are happy to answer any questions during the preparation process and/or get involved if you should need to file a claim. Stay safe!

Benefits of Auto Pay for Your Insurance Premiums

We currently happen to be in a time of uncertainty with some businesses temporarily closing or being short staffed due to Covid-19 social distancing recommendations. One of the concerns that has developed is people still being able to pay their bills, such as insurance premiums.

Thankfully, most insurance carriers accept payment either online or via an automated phone system but Auto Pay could alleviate any worry or doubt you might have about these payments being processed correctly and on time. There are several benefits to Auto Pay, depending on what type of policy it is.

• When it comes to life or disability insurance, a lapse without timely reinstatement could mean that you will now require an underwriting review, sometimes involving medical evidence… or you could even have to secure new coverage at your current, older age and possibly lesser health.

• For a health insurance policy that cancels due to late or non-payment, it cannot be reinstated at all and you would be left without coverage until the next open enrollment period for the following year. Scary, right?!

• For auto or home insurance, it would depend on the company if they were willing to reinstate or rewrite the coverage. The biggest risk here is that something detrimental and very expensive could happen in that lapse period where you would have no coverage at all.

Auto Pay is convenient, yes. It saves paper and printing costs, yes. It’s peace of mind and one less thing to worry about, yes. But it’s also imperative for maintaining some pretty important coverage. This is coverage that you may not be able to get back if you elect to receive a paper bill that gets lost or doesn’t get paid. An Added bonus is cost savings as well… you can almost always save on installment fees by going this route.

If you’re able to arrange Auto Pay either through EFT (electronic funds transfer from a checking account), recurring credit card, online bill pay with your bank, or whatever options there are… it’s definitely the safest way to ensure that your coverage will not be interrupted or affected.

If you have questions about a specific policy or company that we work with, please let us know anytime at info@mcgriffwilliams.com or (352) 371-7977.