Do you know the difference between a sinkhole and catastrophic ground cover collapse?
Did you know home insurance always covers one, but may not cover the other?
Knowledge is power! This post is meant to be a short snapshot of the difference between sinkhole and catastrophic ground collapse (from the viewpoint of the insurance company) and how home insurance plays a role.
Florida has more sinkholes than any other state in the nation. Florida law requires authorized home insurance companies to cover “catastrophic ground cover collapse,” but damage caused by a sinkhole may not be covered by your policy.
So, what’s the difference?
Florida law defines a sinkhole as “a land form 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 (the dissolving) of limestone or dolostone or by the subsidence as these strata are dissolved.”
I believe the important thing to take away here is that a sinkhole is not always a giant hole opening in the ground. In fact, quite often the underground collapsing doesn’t cause a hole and instead causes an inward sloping of an area of land (which is how some of Florida’s lakes and ponds are naturally formed).
“Catastrophic ground cover collapse” is defined as “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.”
I believe the important things to note here is that ALL of the 4 things listed above have to apply to be covered by a home insurance policy under “catastrophic ground cover collapse” coverage.
So how does a home insurance policy cover you in both scenarios.
Catastrophic ground cover collapse: if the sinkhole that forms on your property does meet all the above 4 criteria then your home insurance policy will cover the damages (presuming your insurance company is an admitted carrier).
Important things to note on Catastrophic ground cover collapse:
1. Most sinkholes that form under a home, forms a hole, and damages the home should qualify for catastrophic ground cover collapse.
2. The “All Other Perils” deductible (aka AOP or other than hurricane deductible) should apply. This deductible is normally the smallest deductible on a home owners policy.
Sinkhole: if the sinkhole forming on your property does not meet all four of the criteria to be considered Catastrophic ground cover collapse then it would be covered under the portion of your policy titled “sinkhole coverage”. Your policy may or may not have this coverage, so this is important to know.
Important things to note on Sinkhole coverage:
1. Your policy may or may not include it. It can be included or excluded from a policy.
2. Why would it be excluded? Some home insurance companies require a sinkhole inspection to be submitted before allowing the coverage to be added. These inspections range from $3,000 to $8,000 and so may be out of most consumers budget range.
3. Many home insurance policies that do cover sinkhole carry a 10% sinkhole deductible. This 10% is 10% of the dwelling amount of the home. So, a $200,000 home would carry a $20,000 sinkhole deductible.
If you aren’t sure if your current policy covers sinkhole a quick call to your agent should clear it up. Below is a helpful link if you’re interested. We hope this post brought you some value and thank you for reading! http://www.wellcoveredinsurance.com/contact.html
About the Author:
Richard Dixon is the owner operator of Wellcovered Insurance a local independent insurance agency located in Orange City, Florida.
Fire is possibly one of the worst disasters that can happen to your home. It is so common that we see examples of people who lose everything due to fire so often. Here are some tips to lower the risk of fire in your own home.
So you want to start a business? Congratulations! If you already have a business plan and a good grasp of what you are going to do, then you are already close to seeing your project come to fruition. The next possible obstacle is where to get the capital for your business.
Only a lucky few have sufficient savings to open and operate a business long enough for it to become profitable. So let's look at some ways you can get the all-important support for your dreams.
If you are fortunate enough to have your own business and it grows enough that you need to start hiring employees then let me congratulate you. Also, allow me to give you some tips on how to make the best choices for potential employees.
You may own the most reliable car in the world, but eventually, even it will fail at some point. The absolute worst case is when you get stuck in the middle of nowhere, and you need help.
As technology progresses so does our lives. Often, we rely on technology and what it has to offer. Smartphones, smart cars, and now, a smart home. In this article, you’ll find out the advantages of having a smart home and how you will benefit from it.
It is apparent that car technology is advancing. You may now think that Sci-Fi movie is now a reality. In the past, the future of car technology seems a bit distant but turns out that they soon become a reality within a few years. Here are some technologies that we are hoping to see in the not too distant future.
The success of the business relies on a good team and an excellent leader. It is easy to be the “boss” but being a leader is a hard path to follow. Here are a few guides that will aid you to improve those leadership skills to help bring your business to the top.
It is a known fact that the key to a functional company lies in its employees. Without a happy employee who shows interest in their work, the company will crumble. It is best that you start creating a positive culture to maintain a triumphant corporate mood. Read on how to foster a positive company culture.
As the Business owner, you are your boss and your employee’s boss. That means you might pay more interest in improving business with customers and within. Better performing employees usually reflects better work results, and that will be important.