Florida has more sinkholes than any other state in the nation. Because of this Florida made some changes to its laws regarding sinkhole coverage on homeowners insurance policies. Florida law now requires insurers to cover “catastrophic ground cover collapse”. This now means that damage caused by a sinkhole may not be covered under your home insurance policy. That’s because the law defines catastrophic ground cover collapse differently from sinkholes.
According to the FL Dept of Financial Services, “Florida law defines a sinkhole as “a land form created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole may form by collapse into subterranean voids created by dissolution (the dissolving) of limestone or dolostone or by the subsidence as these strata are dissolved.”
“Catastrophic ground cover collapse” is defined as “geological activity that results in all of the following: 1). The abrupt collapse of the ground cover; 2). A depression in the ground cover clearly visible to the naked eye; 3). Structural damage to the building including the foundation; and 4). 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.”
“This means that if your home is damaged by sinkhole activity, but does not meet all four criteria for catastrophic ground cover collapse – for instance, you may have foundation cracks, but the home is still livable – your insurance may not pay for the damage if you do not have sinkhole coverage.
All insurance companies licensed to do business must offer sinkhole coverage, usually as an addendum or rider to an existing policy, and for an additional premium charge. However, insurance companies may require an inspection before extending coverage. If sinkhole activity is present on the property or within a certain distance of the property to be insured, the insurance company may decline coverage.”
Because of these changes it’s important to find out what is covered under your policy. If you are not sure if you have sinkhole coverage or catastrophic ground cover collapse coverage contact one of our agents today for a full policy review.
For more information on Sinkholes and Catastrophic Ground Collapse please visit the Florida Department of Financial Services website.