Florida Sinkhole Insurance and Your Homeowners Policy

Although sinkholes are categorized by an abnormal indentation in the ground, they can be formed in different ways and can either be slow-moving or abrupt.

Since Florida faces far more sinkholes than any other state, legislation has required the state’s insurers to provide special endorsements or policies that cover sinkholes. Let’s take a look at your policy’s sinkhole coverage.

Although Florida insurers are required to provide homeowners insurance policies that provide protection from “catastrophic ground cover collapse”, that doesn’t mean your standard homeowners insurance policy will cover any instance of sinkholes.

For the catastrophic ground cover collapse to be covered under standard homeowners policies in Florida, your situation must meet four strict criteria:

In order to meet all four of those criteria, a sinkhole must have to occur under your home — or at least under a portion of your home. But that may not be the case with every sinkhole. They tend to start small and gradually increase over time, which wouldn’t be covered by a standard Florida homeowners insurance policy.

However, Florida insurers like Universal Property & Casualty, Citizens and People’s Trust must provide policyholders with an option to purchase sinkhole insurance coverage in the form of a separate policy or an add-on to their current homeowners policies.

This additional sinkhole insurance or add-on will provide coverage for your home’s structure and personal belongings if they’re damaged or destroyed by a sinkhole. But since sinkholes don’t always affect the policyholder’s home and homeowners insurance doesn’t account for the actual property’s value, sinkhole coverage is still a somewhat grey area.

Since sinkholes are pretty common in Florida and they can be extremely costly, every homeowner in Florida should opt for sinkhole coverage. Opting for sinkhole insurance coverage provides coverage for your home, personal belongings and, most importantly, your financial future.

If your home is damaged by a sinkhole, things can go one of two ways. If you have Florida sinkhole insurance, you’d pay your deductible and your homeowners policy would pick up the rest up to your policy’s maximums. But if you don’t have sinkhole insurance, you’d have to pay for the repairs or rebuild out of your own pocket.

Sinkhole insurance covers your home, personal belongings and other structures on your property if they’re damaged or destroyed by a covered peril. Since homeowners insurance only covers your home and many things that create it, your property’s ground isn’t actually covered by homeowners insurance.

That’s just one of the reasons why sinkhole insurance is such an important purchase. Florida sinkhole insurance can help rebuild or repair your home using replacement cost or market value coverage, as well as pay to repair or rebuild other structures on your property like a fence or detached garage, and replace your personal belongings.

The cost of sinkhole insurance in Florida can heavily fluctuate depending on which insurer you choose to go with, amount of coverage you need and where you live in Florida. You may be able to add sinkhole coverage to your homeowners policy for $1,000 per year or it could cost you upwards of $5,000 per year.

There’s no universal cost to be aware of, so you may have to look at a few different carriers. With Clovered, getting sinkhole coverage is super simple because we’ve added it to our online quoting platform. Simply select the sinkhole coverage checkbox and you’ll have coverage added to your policy upon purchasing one from us.

Although the most common sinkhole-affected areas are around Tampa and the South Florida counties of Broward and Miami-Dade, they can occur throughout the state without warning.

Although the U.S. Geologic Survey crew is responsible for putting together metrics about sinkholes, complete numbers don’t exist because they often occur away from homes and aren’t reported to the crew.

However, the Florida Senate Committee on Banking and Insurance compiled extensive reports about the number of sinkhole-related insurance claims in Florida from 2006 to 2010 and the numbers were quite staggering. It found that 24,671 sinkhole-related claims were reported during the five-year span, which comes out to nearly 13.5 claims per day.