Does My Homeowners' Insurance Policy Cover Catastrophic Ground Collapse?

Back in the good old days of yore (which, at this point, was approximately four years ago), whenever an insurance company provided you with a policy of homeowner’s insurance, it automatically included coverage for any damage caused by sinkhole activity.  In 2007, as part of the insurance industry’s never-ending attempt to limit coverage to its clients, insurance company lobbyists convinced the legislators in Tallahassee to change this law and to make sinkhole coverage “optional.” 

In fact, after that initial revision to the law, if you lived in Pasco or Hernando counties, sinkhole coverage was automatically excluded from your insurance policy. If you wanted this coverage, you had to request it and pay an initial premium. For the rest of the state, sinkhole coverage was still included in your policy, but you could opt out if you were feeling lucky!

As part of the insurance industry’s “bait and switch,” the Legislature allowed insurance companies to remove full sinkhole coverage from their Florida policies and provide Catastrophic Ground Cover Collapse Coverage instead.  To qualify for coverage under this new provision, property owners must meet a four-prong test – the last of which states that coverage will only be allowed if the property is both “Condemned” and ordered “Vacated” by a “governmental entity.”  What? 

It is vitally important to review your insurance policy thoroughly. If your policy provides insufficient protection, you should consider obtaining more complete coverage—preferably long before the need to file a claim arises!

Catastrophic Ground Cover Collapse Definition

Catastrophic ground cover collapse means the geological activity that results in all of the following:

  • The abrupt collapse of the ground cover;
  • A depression in the ground cover clearly visible to the naked eye;
  • Structural damage to the building, including the foundation; and
  • The insured structure is being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

This covers severe sinkhole damage in which a government agency declares the home unlivable and condemns it. However, it does not apply to damage any less than a complete condemnation, so even significant foundation cracks or structural damage are not covered if the home is still inhabitable. As such, it is best not to rely on this coverage alone.  

Sinkhole Definition

A sinkhole is a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. It may form by collapse into subterranean voids created by the dissolution of limestone or dolostone or by subsidence as these strata are dissolved.

Sinkhole loss means the structural damage to the building, including the foundation, caused by the sinkhole activity.

Sinkhole activity means settlement or systematic weakening of the earth supporting such property only when such settlement or systematic weakening results from the movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on limestone or similar rock formation.

Coverage Comparison

  • Sinkhole coverage provides more comprehensive coverage than Catastrophic Ground Cover Collapse. If the property suffers foundation cracks or other damage caused by sinkhole activity, meaning it is still habitable but needs repairs, it will be covered with sinkhole coverage.
  • Catastrophic ground cover collapse coverage is very restrictive and must meet all four criteria to qualify for a loss. 
  • Sinkhole coverage does not require the building to be condemned and ordered to be vacated for coverage to trigger.
  • Both catastrophic ground cover collapse and sinkhole coverage are intended ONLY to cover roofed and walled structures. They are not intended to cover cracked driveways, sidewalks, swimming pools, or patio decks. They do not cover sinkhole activity on open land, parking lots, streets or roads, or similar property that may serve a community.

Has Your Home Insurance Company Denied Or Undervalued Your Property Damage Claim In Florida?

If your insurance company is dragging its feet regarding your property damage claim, you should speak with an experienced insurance claim lawyer as soon as possible. Please contact us online or call our Florida law office at 800.451.6786 to schedule your free consultation. We help Florida residents like you fight the big insurance companies who fail to abide by their policies. Remember, we work on a contingent basis, meaning you don't pay us anything until we win your case. 

K.C. Williams III
Managing Partner who has spent his entire career representing Florida insurance and personal injury claims.
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