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  • Craig Harrell

Does Homeowners Insurance Cover Sinkhole Coverage?

Updated: Apr 16

Does Homeowners Insurance Cover Sinkhole Coverage?

Are you familiar with sinkholes? Does Florida have more sinkholes than any other state? If a sinkhole develops under your property, the damage can be catastrophic. Read on as Florida independent public insurance adjuster Craig Harrell and his team explore insurance coverage for sinkholes.

Image Blog: Sink Hole

What are sinkholes?

A sinkhole occurs when the land surface collapses, leaving a depression or hole in the ground. It forms when groundwater slowly wears away the rock below the land surface. Once the weight of the land surface can no longer be supported, a sinkhole forms. If a building is located over a sinkhole, there will be damage.

Does my homeowner policy cover sinkhole damage?

This is not a “yes or no” question. Because of the frequency of sinkholes in the Sunshine State, home insurance companies are required to offer sinkhole coverage as an optional add-on to customers who live in Florida. Florida homeowner policies are also required to cover what is known as “catastrophic ground collapse.”

Here’s where it gets confusing. Under Florida law, a sinkhole and catastrophic ground collapse are not necessarily the same thing. A sinkhole, according to Florida law, is defined as “a landform 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 of limestone or dolostone or by the subsidence as these strata are dissolved.”

Catastrophic ground collapse, meanwhile, is defined as a geological activity. It also has to meet each of these four criteria to classify as a catastrophic collapse:

  1. The abrupt collapse of ground cover

  2. It causes a depression in the ground cover that is clearly visible to the naked eye

  3. It does structural damage to the building, including the foundation

  4. Such damage forces the structure to be condemned and ordered to be vacated by a government agency

Maybe a sinkhole develops under your home but does not do enough damage for the property to be condemned. Perhaps there is significant damage, but none to the foundation. In either scenario, your insurance company may not cover the damage in Florida under the category of catastrophic ground collapse.

Usually, the sinkhole or part of it also has to be located directly under your home. This is a problem, as sinkholes may start small and get bigger as time passes, encroaching on your property. Moreover, any foundation damage from a nearby sinkhole that causes cracks in your foundation as the structure of your home “settles” may also not be covered as catastrophic ground collapse.

Obtaining Sinkhole Coverage in Florida

As mentioned, homeowner insurance companies are required to offer sinkhole coverage in Florida as an add-on. This is also known as an endorsement, or rider, in the lingo of insurance providers. Once again, this can get complicated. Most homeowner insurers require an inspection of the property before they provide coverage. If there is current sinkhole activity on the property or within a certain distance of your home, your insurer may opt to decline to offer this endorsement.

What if my Home Insurance Company Denies Coverage for Sinkhole Damage?

You have options. First, you can opt to participate in the Neutral Evaluation Program offered by the Florida Department of Financial Services. The department will assign a geologist or engineer to come out and provide an impartial, third-party evaluation of both the existence and extent of sinkhole activity, as well as the recommended method of repairing any damage.

Do I Need Optional Sinkhole Coverage?

Absolutely. Remember, sinkholes happen more in Florida than any other state in the U.S. Sinkhole insurance will cover your home, your belongings, and any other structures on your property that may be damaged as a result of a sinkhole. There’s no universal cost estimate for sinkhole coverage, as it varies from provider to provider. That’s where a public adjuster can be such a great resource. A public adjuster has a wealth of knowledge and experience in the insurance world, but unlike an adjuster who works for an insurance company, a public adjuster uses their skills and expertise to help regular homeowners just like you.

Harrell Adjusting is Your Public Adjuster for Sinkhole Coverage Knowledge & Claims Adjusting

Maybe you’ve decided to add sinkhole coverage to your homeowner insurance. Perhaps you already have sinkhole coverage, but you want to make sure it truly covers you or that it will pay for the costs of repairs. Craig Harrell and his team can help. Harrell Adjusting is based in Central Florida but works with customers throughout the entire state.

Schedule an appointment today by calling (863) 559-3405 or inquiring online.


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