Sinkholes are a persistent threat in Florida. Every year, we see several news stories about sinkholes, including one recent one where a woman discovered a large sinkhole just outside her front door.
The risk of property damage from sinkholes is substantial. While huge sinkholes can swallow entire homes, even smaller ones can cause foundation cracks, instability and other potentially-dangerous issues for homeowners. However, while a new law passed in 2016 made it easier for Florida homeowners to obtain insurance for sinkhole damage, this is still a form of optional coverage under standard Florida homeowners’ insurance policies.
Optional Sinkhole Insurance Under Florida Law
The new sinkhole insurance law, formerly known as S.B. 1274, is found in Section 627.706 of the Florida Statutes. It states:
“[Insurers] shall make available, for an appropriate additional premium, coverage for sinkhole losses on any structure, including the contents of personal property contained therein, to the extent provided in the form to which the coverage attaches. [An] insurer may require an inspection of the property before issuance of sinkhole loss coverage.”
Prior to 2016, the law only covered “catastrophic ground cover collapse[s],” which resulted in structural damage and the home, “being condemned and ordered to be vacated by the government.” As a result, although sinkhole coverage is not required, for those who have it, it can provide much-needed funds when a sinkhole causes less than catastrophic damage.
What constitutes a “sinkhole loss”? The statute provides these definitions:
- For insurance purposes, a sinkhole is defined as, “a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole forms by collapse into subterranean voids created by dissolution of limestone or dolostone or by subsidence as these strata are dissolved.”
- A sinkhole loss consists of, “structural damage to the covered building, including the foundation, caused by sinkhole activity.”
- Structural damage to a home includes: (i) interior floor displacement or deflection in excess of acceptable variances; (ii) foundation displacement or deflection in excess of acceptable variances; (iii) significant listing, leaning or buckling of exterior loadbearing walls or other structural members; (iv) damage that makes the home “significantly likely to imminently collapse” due to ground movement or instability; and, (v) damage that qualifies as “substantial structural damage” under the Florida Building Code.
Are You Covered for Sinkhole Damage?
How can you tell if your policy includes coverage for sinkhole losses? If you cannot remember whether you updated your policy, you can check your policy for this language, which is now legally required when coverage for sinkhole losses is excluded:
“YOUR POLICY PROVIDES COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN ADDITIONAL PREMIUM.”
Fort Lauderdale Insurance Claim Law Firm for Sinkhole Losses
If your home was damaged by a sinkhole, our attorneys can help you assert your rights under your homeowners’ insurance policy. Even if you do not have sinkhole loss coverage, depending upon the specific cause of the damage to your home, you may still be entitled to coverage under a different provision of your policy. To learn more, please schedule an initial consultation at our law offices in Fort Lauderdale. Call (954) 767-6333 or request an appointment online now.