Sinkholes in Florida: Are You Covered?

Catastrophic Sinkhole Damage
Catastrophic Sinkhole Damage

Florida has more sinkholes than any state in the nation, and The Villages is not immune.  But not all sinkhole damage may be covered by homeowners insurance. Photo Courtesy U.S. Geological Survey.

Will your insurance company pay for damage to your home if you are faced with a sinkhole? You need to know the answer — especially in Florida, where the landscape is pocked with more sinkholes than any other state. And The Villages is not immune. Here a some recent news stories about sinkholes in The Villages:

  • “Sinkholes on the rise in Lake, experts warn” — Orlando Sentinel
  • “Sinkhole in The Villages reopens, grows larger” — ClickOrlando.com
  • “Sinkhole opens in The Villages driveway” — WESH TV

To know whether your homeowners insurance policy covers sinkhole damage, you need to understand the legal difference between a ‘sinkhole‘ and ‘catastrophic ground cover collapse.’

By law, Florida homeowners insurance must cover what is called ‘catastrophic ground cover collapse.’  This term refers specifically to “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.”

If damage to your home meets all of these criteria, your insurance must pay for the damage. If your home is damaged but the damage doesn’t meet these criteria, you may not be covered unless you have additional sinkhole coverage.

Companies offering homeowners insurance in Florida must offer sinkhole coverage, but it usually comes at an additional cost. And insurers may require a home inspection prior to extending coverage for your home. If there are sinkholes in the vicinity, the insurance company may decline to offer coverage.

You need to know the facts before purchasing a home. Here are some questions you’ll want to ask your insurance agent before buying a home:

  • Is this home insurable?
  • Does my homeowners policy offer coverage for sinkhole damage?
  • What documents would be required before making a sinkhole claim?
  • How would pre-existing damage be evaluated in a sinkhole claim?
  • Would the sinkhole portion of the policy be canceled after a claim is filed?

What if a sinkhole appears on your property? Here are the steps you need to take:

  1. Contact your insurance agent and request an adjuster come out to look at the property.
  2. If an actual cavity opens up, rope off the area and call your local emergency management organization.
  3. If the adjuster verifies sinkhole activity, your insurance company should then arrange for an engineering firm to come out and begin testing. This testing probably will include some drilling and the taking of soil samples.
  4. Test results should come from your insurance company within three to five weeks.
  5. If you do not agree with the engineer’s results, you can hire another engineering company, at your expense, and/or hire an attorney.

Kevin McDonaldThis article was sponsored by The McDonald Agency. The McDonald Agency is here to help you. Let’s discuss your insurance options and needs regarding sinkhole coverage. We have two Ocala locations and one in The Villages. Contact us today at (352) 351-4020 in Ocala or (352) 259-3825 in The Villages. Visit us online at TheMcDonaldAgency.com.

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