Sinkholes are depressions in the surface of the ground caused by the settlement or sudden
collapse of the land and have the potential to destroy homes. Most insurance policies exclude
damage resulting from movement of the earth, therefore such coverage needs to be purchased
Sinkhole insurance provides cover for damage to your home, other structures on your property
as well as your personal property within these structures if they incur damage or loss due to a
sinkhole on your property.
Depending on where you live, certain states require home insurers to offer ‘catastrophic ground collapse’ coverage as part of their homeowners insurance, whilst others require earth movement to be made available as an optional extra.
If you live in a high-risk area, discuss with your insurance agent whether additional coverage for earth movement is available to you. Sinkhole coverage is not easy to get and insurance providers have strict guidelines they follow. Before issuing a sinkhole insurance policy, property insurance companies will have a professional engineer conduct a visual inspection of your home, for which you are required to pay an upfront fee. Should they find any existing evidence of earth movement, such as minor cracks, most insurers will decline sinkhole coverage for your property.
When purchasing sinkhole insurance be sure to have sufficient cover to rebuild your home and other structures if they are completely destroyed. This insurance will also cover essential preventive measures, such as structural bracing, to help keep a looming sinkhole from causing severe damage to your property.
Be sure to review the terms of your sinkhole coverage as some insurers do not provide cover for damages resulting from mine subsidence.
Depending on where you live, whilst the risk of a sinkhole may seem low, the consequence is potentially shattering to a homeowner, thus it’s worth speaking to your insurance agent about the options available and the premiums thereof. If you don’t live in a high-risk area, these premiums may be relatively low and therefore worth considering.