Homeowners insurance provides coverage against a wide range of common disasters, ranging from hurricanes and fires to vandalism and theft. Florida homeowners, in particular, are often more susceptible to damages from hazards like hurricanes and sinkholes due to their location.
Since sinkholes are such a common occurrence in Florida and the Miami area, insurance providers are required to offer endorsements that cover sinkholes. While this coverage is not required, homeowners should strongly consider purchasing it if they live in an area that is susceptible to sinkholes.
Here’s everything Florida homeowners need to know about whether or not homeowners insurance covers sinkholes.
What is a Sinkhole?
A sinkhole is a depression in the surface of the ground that occurs when the surface layer of the ground suddenly collapses. When this occurs near a house, it can cause extreme damage to the home’s structure and foundation. In some cases, sinkholes can even completely destroy a property.
Damages caused by sinkholes can be extremely costly to repair. Beyond repairing the home itself, you may also have to pay to stabilize the ground under and around the home.
Florida experiences more sinkholes than any other state, making it important for homeowners in areas like Miami, Pembroke Pines, Weston Davie, and Miramar to understand these risks and protect themselves against them.
Does Florida Homeowners Insurance Cover Sinkholes?
A standard homeowners insurance policy may or may not cover damages caused by sinkholes. Homeowners insurance includes a coverage referred to as catastrophic ground cover collapse, which covers your property against damages caused by some geological activity.
For this coverage to apply, four criteria must be met:
1. The depression in the ground must be visible.
2. The sinkhole must have caused foundational or structural damage to your home.
3. A government agency must condemn and evacuate the home.
4. The top layer of soil on the ground must sink abruptly.
This means that, for example, if the sinkhole starts small and gradually becomes larger over time before damaging your home, it would not be covered by a standard home insurance policy in Florida.
For more comprehensive coverage against sinkholes, Florida homeowners can purchase sinkhole coverage as an endorsement on the homeowners insurance policies. As sinkholes are a common occurrence in Florida, insurers are required to offer this coverage as an optional add-on.
Sinkhole Insurance vs. Catastrophic Ground Coverage Collapse
Catastrophic ground cover collapse can protect your home against sinkhole damage if the four criteria outlined above are met, but it does not offer the same level of comprehensive protection that sinkhole coverage does.
Sinkhole coverage does not require the government to condemn the structure to cover losses caused by sinkholes, making it much easier for homeowners to successfully file a claim if a sinkhole forms under or near their property.
How Sinkhole Coverage Works
Sinkhole insurance covers both your property and personal belongings against damages caused by sinkholes.
Sinkhole coverage typically applies when your home shows signs of structural damage due to a sinkhole, including:
● Foundation displacement
● Floor damage
● Wall damage
● And more
For this coverage to apply, a professional must confirm that the damage was caused by a sinkhole.
Sinkhole insurance can help pay to repair damages to your home, replace personal belongings, and rebuild other structures on your property.
Who Needs Sinkhole Coverage in Florida?
Sinkhole insurance is not required in Florida; however, due to the frequency of sinkholes in the state, homeowners should strongly consider purchasing this optional coverage to protect their property and personal belongings against damages.
Sinkholes in Florida are particularly common in the South Florida counties of Broward and Miami-Dade, making it an important consideration for homeowners in these areas.
If your home already has unrepaired or remediated sinkhole damage, it may be difficult to find coverage. In these cases, you may be limited to the catastrophic ground cover collapse included in your standard home insurance policy.
How Much Does Sinkhole Coverage Cost?
The cost of sinkhole insurance in Florida can vary significantly depending on several factors, including:
● Amount of coverage
● Age of home
● Size of home
● And more
In some cases, sinkhole coverage may cost upwards of $5,000 per year, while homeowners in lower-risk areas may be able to purchase this endorsement for closer to $1,000 per year.
Request a Homeowners Insurance Quote
Homeowners insurance offers essential coverage against a wide range of common disasters, but for Florida homeowners, it may not be enough to cover damages caused by sinkholes. If you live in an area prone to sinkholes, you may need sinkhole insurance to protect your home and personal belongings against potential damages.
Contact FIB Insurance today to get a custom quote and learn more about homeowners insurance in Miami, FL.