In high-risk areas, policies can be costly. The annual premium for sinkhole loss coverage in some Florida counties can be more than the average cost of a homeowners insurance policy in the state. To determine the likelihood of a future sinkhole, consult a professional research or the history of the land around your property.
Homeowners who built their homes in places where sinkholes are unlikely to occur may opt out of coverage. Though it’s difficult to predict when and where sinkholes may occur, the Insurance Information Institute quotes academics who believe that sinkholes strike a given property roughly once every 100 years.
Is sinkhole insurance worth it in Florida?
Most homeowner’s insurance policies do not cover earth movement, such as sinkholes and earthquakes, which can range from a minor shift in the soil beneath a building’s foundation causing significant damage to a massive sinkhole swallowing up an entire property.
Because the real estate value of the ground is omitted when home insurance policies are priced, most property insurance plans exclude damage caused by earth movement. The cost of rebuilding a structure is covered by insurance, and the cost of the land is not included in the premium.
However, for an extra fee, several policies include sinkhole coverage through special endorsements or standalone policies. A homeowner would not be compensated for their losses if they did not have supplementary coverage.
An auto insurance policy’s comprehensive coverage will cover loss or damage to a vehicle caused by a sinkhole, just as it would from fire, theft, or falling debris.
Types of sinkhole insurance
Sinkhole insurance comes in two flavors: Sinkhole Loss Coverage and Catastrophic Ground Collapse.
Sinkhole Loss Coverage is the first, and it’s a sinkhole endorsement that only covers earlier mining operations. Some insurers refuse to cover naturally occurring sinkholes, while others do so and focus on sinkholes created by natural events. A geological survey of the land will almost certainly be required to obtain coverage, to ensure that there is no clear risk of a sinkhole collapse.
Catastrophic Ground Collapse insurance is a unique type of coverage. Only Florida and Tennessee demand it of its residents. The majority of sinkholes are not covered since they must meet four criteria:
- The building, including the foundation, must be structurally damaged.
- The government agency with the authority to do so must condemn and order the vacating of the insured structure.
To qualify for this coverage, a residence must be on the verge of collapsing into a sinkhole. Even if it creates foundation fractures, catastrophic ground collapse coverage won’t help unless the house is condemned.
Sinkhole insurance is required in Florida and Tennessee, and it provides comprehensive protection against sinkhole damage.
If you purchase sinkhole insurance, be sure you have enough coverage to replace your property completely if it is damaged. It should also include preventative measures such as structural bracing to ensure that a looming sinkhole does not cause significant damage to your home.
How much does sinkhole insurance cost?
Sinkhole insurance may be helpful albeit pricey if you reside in Florida or another area prone to sinkholes.
Sinkholes are tough to forecast, but they are more common in some locations than others. Insurance in Florida and Pennsylvania, the two states with the most sinkholes, can be costly, although insurance in less active locations can be less expensive. Annual premiums for sinkhole coverage in some Florida counties with a history of sinkholes exceed $2,100. This is greater than the state’s average homes insurance coverage of $1,991.
The Bottom Line
The amount of risk you’re willing to incur will play a huge role in whether or not you get sinkhole insurance. Do you consider yourself fortunate to live in a region without a history of sinkholes? Then don’t bother with the extra insurance.
If you’re unsure or believe you reside in a sinkhole-prone location, consult a professional. Consult the above-mentioned USGS map and seek advice from your insurance agent. Also, if you’re going to view sinkhole footage, don’t be too concerned.
What insurance companies cover sinkholes in Florida?
Insurers in Florida, such as Universal Property & Casualty, Citizens, and People’s Trust, must provide policyholders the option of purchasing sinkhole insurance as a separate policy or as an add-on to their existing homes policies.
How much does it cost to repair a sinkhole in Florida?
Sinkhole damage to a home might cost $10,000 to $20,000 to repair. A more lasting and expensive method, compaction grouting, might cost up to $100,000. To put it another way, a homeowner with a 10% deductible would have to pay $30,000 out of pocket to fix a $300,000 house before insurance kicks in.
According to Hans Haahr, a sinkhole plaintiff attorney in St. Petersburg, “there truly isn’t sinkhole coverage currently” because of the exorbitant premium, large deductible, and low possibility of a successful claim.
Homeowners could be better suited conserving their money and depending on the catastrophic ground collapse coverage provided in all homeowners’ insurance in the worst-case situation, he suggested.
“Citizens have taken over such a large piece of the industry that they can tell everyone what they want to do and not pay for it,” Haahr added.
From Citizens Property Insurance’s perspective, the sinkhole repair has gone off without a hitch.
Elaina Paskalakis, Citizens’ vice president of claims litigation, said, “I don’t think it’s gone too far.” “I believe the definition of what constitutes coverage has been clarified for the industry…. From our point of view, we’re quite fine with it.”
Paskalakis’ legal team is quickly whittling down its pile of legacy sinkhole claims, armed with that clarity of coverage and a war chest to spend on settlements.
Does home owners insurance cover sink holes?
Sinkholes are not covered by a conventional homeowners insurance policy since “earth movement” is excluded. That implies you won’t be compensated if a sinkhole causes damage to your home or personal property.
Sinkhole coverage is frequently available as an endorsement (sometimes known as a rider) to a homeowners insurance policy, depending on your insurance carrier.
Sinkhole insurance is required in some areas, such as Florida and Tennessee, and is available as an optional plan. Some insurance companies, however, provide sinkhole coverage in their policy. Sinkhole coverage is included in Erie insurance for clients in Tennessee, for example.
- Alabama. Sinkhole coverage may be available at an added cost from homeowners’ insurers in Alabama.
- Florida. Sinkhole coverage is required to be offered as an add-on by home insurance carriers in Florida. “Catastrophic ground cover collapse” must be covered by Florida homeowners’ insurance policies. (See below for more information.)
- Kentucky. Sinkhole collapse coverage may be available as an optional coverage type for homeowners in Kentucky.
- Missouri. Sinkhole collapse coverage may be available as an endorsement from homeowners’ insurance providers in Missouri. If your insurer is unable to provide coverage, you may be eligible to purchase a separate sinkhole policy through the Missouri FAIR plan.
- Pennsylvania. Homeowners in Pennsylvania will have to pay an extra fee to their insurers for sinkhole coverage.
- Tennessee. Sinkhole coverage is mandated by law in Tennessee for all home insurance companies.
- Texas. Sinkhole coverage may be available as an endorsement to a homeowner’s insurance policy in Texas.
Can you buy sinkhole insurance in Florida?
All Florida insurance companies are required to “provide” sinkhole coverage, but an insurance company’s willingness to give sinkhole coverage is dependent on the characteristics of the earth structure beneath your house. The state of Florida has more sinkholes than any other in the country.
What is a sinkhole?
Sinkholes are depressions or holes in the ground caused by the flow of rock or sediment into voids generated by water-soluble rock dissolving. Sinkholes can be small or huge, shallow or deep. According to studies, low water levels, a lack of rainfall, or even significant rainfall over short periods of time all contribute to the formation of sinkholes.
Does my home insurance cover sinkhole damage?
According to the Florida Senate Banking and Insurance Committee, property insurance policies routinely exclude coverage for earth movement, such as sinkholes, across the country. Home insurance plans were never designed to cover what happens below ground, such as a sinkhole, according to Lynne McChristian, the Insurance Information Institute’s representative in Florida. Its purpose is to cover the structure as well as the contents.
Check your insurance policy for your home or other property to see if it covers sinkholes, according to the Pennsylvania Department of Conservation and Natural Resources.
“Finding out after the fact that your house is not covered by your insurance for damages caused by (a sinkhole) is a difficult lesson to learn,” according to the department.
Sinkhole damage coverage has been required for home insurance carriers in Florida since 1981, at an additional fee.
Sinkholes are not covered by most homeowner’s insurance policies, including those from State Farm, the nation’s largest home insurer. “Any damage caused by them is clearly excluded,” says spokesman Kip Diggs.
State Farm, according to Diggs, only covers sinkhole damage in three states: Alabama, Florida, and Pennsylvania.
Farmers Insurance homeowner’s insurance plans, according to spokesman Luis Sahagun, only cover sinkhole damage in two states: Florida and Tennessee.
What should I do if I sinkhole shows up on my property?
It is recommended that you call your insurance carrier if a sinkhole appears on your property. Notify your county’s emergency management agency if there has been serious damage. If you’re unsure if you have a sinkhole, get a private contractor to inspect it.
If your home is damaged by a sinkhole, your insurance company will likely seek a geological investigation to determine the cause of the damage. If it’s a sinkhole, the insurer will usually cover the costs of testing and repairs (minus your deductible). McChristian estimates that testing a potential sinkhole will cost between $8,000 and $12,000.
If your home’s foundation has been damaged by a sinkhole, specialists may need to pour cement to shore it up.
Will what has occurred in Florida happen in other states?
That is extremely unlikely. Sinkhole claims haven’t been a major concern in the United States, with the exception of Florida.
“In Texas, we haven’t seen a lot of sinkholes,” says Jerry Johns, a representative for the Southwest Insurance Information Service.
“If that becomes an issue,” Johns continues, “it will differ from insurance company to insurance company.” That type of loss will be viewed differently by each organization.”
According to Lynne McChristian, the Insurance Information Institute’s representative in Florida, one way the new state law will reduce bogus sinkhole claims is by precisely defining what constitutes structural damage caused by sinkholes. Because previous state law did not include any criteria for sinkhole-related structural damage, many dubious sinkhole claims were rewarded. Many Florida sinkhole claims, for example, involving breaches in foundations, driveways, walls, and ceilings have been paid, despite the fact that the damage was caused by natural settling of the ground beneath a home. One issue is that it’s difficult to prove that a sinkhole is to blame for such damage.
According to McChristian, only 1% of Florida sinkholes cause significant property damage. Officials in Florida can’t pinpoint a geological basis for the rise in sinkhole claims.
According to a report from the state Senate Banking and Insurance Committee, more than three-quarters of Florida policyholders did not repair any property damage after receiving a sinkhole claim settlement in recent years.
Some people learned they could just “take the money and run” because the old Florida legislation didn’t compel landowners to fix sinkhole damage after receiving claim funds, according to McChristian.
How do you know if your house has a sinkhole?
A sinkhole is a natural geological danger that can quickly worsen and cause significant damage. It has the potential to do considerable damage to roads and structures, necessitating expensive repairs. It can potentially jeopardize water resources by draining unfiltered water directly into the subsurface water supply from marshes, lakes, and streams.
Sinkholes are especially common in regions where the surface rock is limestone, which erodes readily when exposed to water. Erosion rates are highest in locations with a lot of rain. Sinkholes affect over 20% of the country’s surface area, with the biggest damage occurring in Kentucky, Florida, Alabama, Texas, Missouri, Pennsylvania, and Tennessee.
Sinkhole Triggers
A sinkhole may appear to arise out of nowhere, but many of them develop over hundreds or even thousands of years. They form long before any observable evidence appears on the surface. Sinkholes are what people observe on the ground surface as a result of a hole in the rock underneath them. A sinkhole, on the other hand, might be triggered by a number of factors.
A sinkhole can be triggered by a variety of sources, both man-made and natural. A sinkhole can also be triggered by placing weight above cavities, such as a structure. Sinkholes are caused by human land use practices, particularly construction and water pumping. Artificially creating surface water ponds, drilling extra wells in a given region, over-pumping existing wells, constructing structures and roadways, and constructing housing developments are just a few examples. Abandoned septic tanks, decomposing organic debris, and collapsing mines are examples of human-caused triggers.
Natural triggers include surface floods, strong rain, and drought. Drought can expose cave roofs and lower the water table, allowing sinkholes to form. Heavy rainfall, on the other hand, has the potential to dissolve subsurface rock, resulting in the formation of underground cavities. This is most common in regions where the subsurface rock is limestone, carbonate rock, dolomite, or salt beds, all of which can dissolve naturally owing to circulating groundwater.
Sinkhole Prone Areas
They’re mostly found in karst areas. This is a landscape made up of soluble rocks such as limestone, gypsum, and dolomite that have been broken apart. They arise when a subsurface rock crack enlarges, increasing the danger of groundwater contamination. Karst covers 20% of the United States’ land surface. Kentucky is home to one of the country’s most well-known karst landscapes. A sinkhole developed beneath the floor of the National Corvette Museum in Bowling Green, Kentucky, on February 12, 2014, swallowing eight one-of-a-kind corvettes, rails, and display stands.
Types of Sinkholes
Solution sinkholes, cover collapse sinkholes, and cover subsidence sinkholes are the three basic varieties. Solution sinkholes form when a thin layer of permeable land and soil covers or exposes the limestone rock bed at the land surface. Individual grains of sand move sequentially downward to replace other grains of sand that have moved downward to take up spaces previously held by dissolved limestone in cover subsidence sinkholes, which are generally porous and non-cohesive. Finally, cover collapse sinkholes occur in regions where a hollow forms in the limestone and grows to the point where the surface cover can no longer support its own weight.
The Devil’s Sinkhole in Edwards County, Texas, the Daisetta Sinkhole in Texas, Winter Park in Florida, and Seffner in Florida are just a few of the most well-known sinkholes. For example, the Daisetta was a massive sinkhole that was 900 feet broad and 400 feet deep. The Winter Park sinkhole, which was 350 feet wide by 75 feet deep, was also rather large. The sinkholes in Edward’s County and Seffner were smaller, measuring 40 feet by 60 feet by 400 feet deep and 20 feet by 50 feet deep, respectively.
How to Spot a Sinkhole
Structural fissures in floors and walls, windows and doors that do not close properly, and hazy or muddy well water are some of the warning indicators that a sinkhole is present. Exposure of previously business items, such as fence posts and foundations, flora that wilts and dies as the sinkhole takes away necessary water, and a circular pattern of ground fractures are all signs of a sinkhole on the land.
Small ponds may emerge after heavy rains, fence posts or trees may collapse or slump, electricity service or plumbing may be disrupted due to damaged utility lines, and gullies may form as soil is transported towards the sinkhole.
Does progressive offer sinkhole coverage?
Earth movement, such as mudslides, earthquakes, and sinkholes, is often excluded from standard homeowners insurance plans. Sinkhole insurance may be available as an add-on to your homeowners policy. This is an endorsement or rider that may be added to your existing policy to cover damage caused by sinkholes. Personal belongings contained within your damaged dwelling at the time of the loss may be covered under your sinkhole policy.
Sinkhole coverage may pay for the repair or rebuilding of your house if it is damaged by a sinkhole, up to the amount of your coverage. To ensure that the sinkhole problem is fixed, you may need to restore your home’s foundation and stabilize the soil it stands on.
You must show that your home has suffered structural damage or is in danger of collapsing owing to a sinkhole in order to pursue a claim. Other constructions on your property may be covered as well.
What is the difference between sinkhole coverage and catastrophic ground cover collapse?
Catastrophic ground cover collapse coverage is highly limited, and to qualify for a loss, you must meet all four requirements indicated above. For sinkhole coverage to kick in, the building does not have to be condemned and ordered to be demolished.
How much does it cost to fix a sinkhole in yard?
Sinkholes are a natural feature of Florida’s geological geography, and they can cause significant property damage. Homeowners should take preventative measures to protect their homes from sinkholes and be aware of the costs of sinkhole repair. Sinkhole repairs are done by structural engineers, and the cost is determined by the level of the damage, the square footage of the affected region, and the quantity of structure that needs to be remediated.
Because no two sinkholes are comparable, estimating the typical cost of sinkhole rehabilitation is challenging. A modest sinkhole that causes minimal structural damage can cost anywhere from $10,000 to $15,000. Sinkholes that cause major damage and necessitate a substantial amount of labor to restore or resuscitate the structure, on the other hand, can be far more expensive, costing anywhere from $20,000 to $100,000 or more.
A structural engineer will assess the damage and associated costs during the sinkhole investigation depending on a number of criteria. These elements include:
Cost of supplies, tools, and any other ways for repairing the sink hole’s damage
If homeowners suspect any damage, no matter how minor, the best approach to avoid sinkhole repair fees is to contact expert, qualified engineers to evaluate their home. In the long term, homeowners who ignore small cracks or foundation difficulties risk causing more damage and financial costs.