Owning a home involves protecting it from risks that could lead to severe financial and emotional losses. A lesser-talked-about phenomenon that impacts homeowners is sinkholes. While sinkholes can be unpredictable, conditions like soil material or climate can play a role. States most prone to sinkholes include Florida, Texas, Missouri, Alabama, Tennessee and Pennsylvania.

There are three different types of sinkholes:

1. Solution: bedrock or limestone is dissolved by groundwater, forming a saucer-like dent
2. Cover-subsidence: soil gradually settles into the bedrock, causing the ground to become less level
3. Cover-collapse: ground abruptly collapses, causing damage to the surrounding area

Catastrophic ground cover collapse (CGCC) sinkholes are the most disastrous. They differ from the other types of sinkholes due to the damage caused. Following an abrupt collapse, a depression in the ground is clearly visible, causing damage to the building and foundation. In these events, the building is typically condemned and vacated. In some states, such as Florida, there are statutes in place requiring property insurers to provide coverage for all CGCC events.

In areas with high risk for these types of sinkholes, homeowners are required to conduct an inspection with a third party, with the policyholder and insurer splitting the cost. If the home passes the inspection and qualifies for coverage, a separate deductible is traditionally applied at 10% of the dwelling coverage limit. In lower-risk areas, this coverage is automatically applied to the policy and subject to the All-Other Perils deductible.

It’s essential to be mindful of these catastrophes and take the proper steps to secure adequate coverage. As climate disasters increase in severity, causing heavy storms and flooding, sinkhole risk may increase. By understanding your insurance coverage and being proactive, you can help mitigate the financial burden associated with sinkholes.

Brown & Brown’s has a specialized Personal Insurance team to answer questions and help you navigate the complex insurance landscape.

Personal Insurance Team