Sinkhole Insurance What is it and do I need it?
Here in Florida we are exposed to many natural disasters. This list includes wild fires, Sinkholes, hurricanes, tornados, and flooding. Its a beautiful place to live and work but definitely comes with its risks. Florida has more Sinkholes than any other State in the Nation.
One of the top questions we are asked every day by existing clients and potential clients is do I have or do I need coverage for Sinkholes?
Well as you probably guessed the answer isn’t that simple.
Just about every single Dwelling Fire Policy (DP3) which is used to insure rental properties or Homeowners Insurance Policy (HO-3) comes automatically with an endorsement called CATASTROPHIC GROUND COVER COLLAPSE.
This endorsement basically states that if your house falls into a Sinkhole you have coverage. Or if a governmental agency declares your property to be condemned you have coverage.
The “Sinkhole” endorsement provides more complete coverage over and above Catastrophic Ground Cover Collapse. All insurance companies are required to offer the Sinkhole endorsement but this does not mean that you can always get the coverage added to your policy.
They first require you to buy at your expense an inspection to determine if there is any sinkhole activity on your property. This generally runs around $200. Then the insurance company reviews the inspection and makes the final determination on whether you can have the endorsement or not.
If your property or other properties in close proximity have had any sinkhole activity they will most likely deny adding the endorsement. Also if your property has an cracks in the stucco or driveway they will more than likely deny adding the coverage.
Do all Insurance Companies Require a Sinkhole Inspection
One company that we write home insurance and rental property insurance with many times allows our clients to add the Sinkhole Coverage without having to order and pay for an inspection.
If you would like a quote for your property give us a ring or email us. We would be honored to have the opportunity to work with you.
Discovery Insurance Agency