Florida is famous for many things: hurricanes, alligators, and even the occasional title “Florida Man.” But one of the state’s biggest hazards lurks underground: sinkholes.
If you own property in Florida, you may be wondering how sinkholes affect your insurance coverage. Does your home insurance policy cover them? Is catastrophic ground cover collapse the same as insurance against sinkholes?
In this article we will compare Sinkhole cover vs. catastrophic collapse of vegetation coverexplain the differences and help you understand what your policy can and cannot cover.
What are sinkholes?
If you’ve just moved to Florida, you may not be familiar with these geological disasters. They’re just another part of life in the Sunshine State.
A sinkhole is a depression in the ground caused by the collapse of the underlying structure. Florida is underlain by limestone, a type of porous rock that can wear away as water passes through it. When water seeps into the ground, which often happens during our many summer storms, the slightly acidic water begins to dissolve the limescale.
As new cracks develop, the surface area of the limestone increases and more water enters to dissolve it. After a while, the remaining limestone may no longer be strong enough to support the soil above, causing the surface to collapse.
This is just one way sinkholes can form. Drought, well drilling, excessive withdrawal of groundwater, and other factors can make sinkhole activity more likely.
Some sinkholes are small enough to damage a hangar or performance hall. Others are large enough to swallow entire buildings. They can occur gradually or suddenly, and repairing the damage can cost hundreds of thousands of dollars.
Sinkhole warning signs
Unfortunately, there isn’t much you can do to prevent a sinkhole from appearing on your property. However, you can watch for warning signs so you can react before the damage gets worse.
Some warning signs of a developing sinkhole include:
- Cracks or fissures in the foundation
- Doors and windows that no longer close properly
- Drooping vegetation
- Cracks, puddles or holes in the ground
If you notice any of these warning signs on your property, contact a specialist as soon as possible. Depending on what’s going on underneath your home, there are steps you can take to help reduce further damage and keep your family safe.
Does my home insurance policy cover sinkholes?
With so much at stake, you may be wondering if sinkhole damage falls under your insurance coverage.
The short answer is: sometimes.
Since 2007, all homeowners insurance policies in Florida have been required to include catastrophic coverage against canopy collapse. This may include some losses related to sinkholes, but it does not cover all types of damage caused by sinkholes. To get broader protection, you may need to purchase a sinkhole insurance endorsement for an additional fee.
Coverage of sinkholes and catastrophic collapse of vegetation cover
The two terms may sound similar, but there are important differences between sinkhole coverage and catastrophic land cover collapse coverage.
As with many insurance policy issues, fraud and abuse have led insurance companies to make a clear distinction between standard coverage for catastrophic ground cover collapse and broader sinkhole insurance.
Let’s look at the main differences between the two.
Catastrophic collapse of vegetation cover
Coverage for catastrophic roof collapse is included in Florida homeowners insurance policies.
However, your claim must meet four conditions before your insurance company will reimburse you for the loss:
- The sudden collapse of the vegetation cover
- A depression in the ground cover clearly visible to the naked eye
- Structural damage to the insured building, including foundations
- The insured structure being condemned and ordered to be released by the government agency authorized by law to issue this order
Again, these four conditions must be met for the loss to be considered a catastrophic collapse of vegetation cover. If only some of these conditions are met, you will likely need separate sinkhole insurance for coverage to apply.
Sinkhole insurance
A sinkhole insurance policy covers structural damage to the insured building, including the foundation, caused by sinkhole activity. A sinkhole is generally defined as the systematic settling or weakening of the earth caused by the movement of soil, sediment, or rock into underground voids created by the dissolution by water of limestone or similar rocks.
Because sinkhole insurance policies cover a wider range of claims, they can be much harder to find. Florida experiences enough sinkhole activity that many insurers do not offer this type of coverage at all. When sinkhole insurance endorsements are available, they often come with deductibles of 10% or more of the value of the home insured.
This increased deductible does not apply to catastrophic roof collapse coverage.
Do I need both?
When comparing sinkhole coverage to catastrophic collapse of vegetation cover, the difference comes down to the extent of protection.
Insurance against sinkholes is much broader than coverage against catastrophic ground cover collapse. It can cover damage that does not meet strict requirements for catastrophic ground cover collapse. However, because the coverage is broader, it can also be more expensive and more difficult to obtain.
Catastrophic ground collapse coverage does not cover all losses from sinkholes, but it can provide protection in many serious situations where a home is directly affected by a major collapse.
The best place to start is to review your home insurance policy to understand what is covered and where there may be gaps.
Insurance policies are not always easy to read. If you are unsure what your policy covers, talk to your insurance agent or insurer. They can explain your coverage and help you determine if additional sinkhole protection is right for your situation.
What about commercial property insurance?
Sinkholes aren’t just a concern for homeowners. They can also create serious risks for commercial property owners and business operators throughout Florida.
Damage to an office building, shopping center, warehouse or other commercial property can interrupt business operations, create safety issues and result in costly repairs. Depending on the extent of the damage, businesses may also face temporary closures, loss of revenue or costly structural repairs.
Commercial real estate policies do not handle all losses from sinkholes in the same way. Coverage depends on the policy wording, endorsements and the type of loss involved. Some companies may have limited protection in the event of a catastrophic ground collapse, while broader sinkhole coverage may require additional endorsements or specialized coverage.
If you own commercial property or operate a business in an area with known sinkhole activity, it is worth reviewing your insurance policy with your agent. Understanding your coverage before a loss occurs can help you avoid unexpected gaps and ensure your assets are properly protected.
Conclusion
The threat of sinkholes can be frightening. The good news is that they are relatively rare and many of the reported sinkholes occur in Hernando, Pasco, Hillsborough and Pinellas counties. Here in Central Florida, alligators and hurricanes often pose a greater threat to personal property.
For added peace of mind, consider verifying your address with the Florida Department of Environmental Protection. Subsidence Incident Reports Map to see sinkholes that have occurred near you. If you live in an area with high sinkhole activity, it may be worth purchasing additional sinkhole insurance.
And if you have questions about auto insurance, life insurance, renters insurance, commercial property insurance, or home insurance in general, contact our offices to learn more. With over 30 years of experience in the Orlando insurance market, we have the knowledge and experience to help you.
We look forward to meeting you!
