If you are purchasing a house in Florida then you should consider getting sinkhole coverage. Sinkholes are a common feature of Florida's landscape. They are one of many kinds of karst landforms, which is a generic term that refers to terrain produced by erosional processes associated with the chemical weathering and dissolution of limestone or dolomite. Dissolution of carbonate rocks begins when they are exposed to acidic water. Most rainwater is slightly acidic and usually becomes more acidic as it moves through decaying plant debris.
A number of other factors can cause holes, depressions or subsidence of the ground surface. Expansive clay layers in the earth may shrink upon drying, buried organic material, poorly-compacted soil after excavation work, buried trash or logs and broken pipes all may cause depressions to form at the ground surface. These settling events, when not verified as true sinkholes by professionals, are collectively called "subsidence incidents". If the settling is affecting a dwelling, further testing by a licensed engineer with a professional geologist on staff or a professional geology firm may be in order. Property insurance may pay for testing, but in many cases insurance may not cover damage from settling due to causes other than sinkholes.
When purchasing home insurance, make sure that sinkhole insurance is included within the policy. If you are unsure if sinkhole insurance coverage is included then you should contact your home insurance company. Prior to purchasing your house, consider a home inspection to make sure there are no signs of sinkholes within your property. Sinkhole testing is a great option prior to purchase, but an insurance company will not require you to complete any testing prior to granting coverage.
Florida mortgage lenders require homebuyers to have a home inspection complete prior to purchase. The home inspection addresses possible sinkhole activity, such as cracks in the foundation and walls. A recent change in Florida law requires authorized insurers to cover “catastrophic ground cover collapse,” but damage caused by a sinkhole may not be covered by your policy because the law defines catastrophic ground cover collapse differently from sinkholes.
Currently, an insurance company has the right to not issue an insurance policy on the basis of sinkholes in the area. The definition of “area” remains subjective, and the issue will likely only be resolved through specific legislation or by the general adoption of a standard by the insurance industry. Some companies utilize private sinkhole data to assign relative sinkhole risk. Other companies may have more liberal policies, and you may wish to shop around for other insurance that may be available.
Florida homeowners should really consider sinkhole coverage for their property in case they have property not covered under catastrophic ground cover. This will insure that they will be made whole in case their property is on a sinkhole.
If your home is damaged by sinkhole activity, but does not meet all four criteria for catastrophic ground cover collapse then your insurance may not pay for the damage if you do not have sinkhole coverage. The following four criteria for coverage includes 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;
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.