Your home can be seriously damaged by many different events. Some risks are relatively consistent no matter where you live, such as house fires or damage caused by negligent contractors. Other dangers may be significantly higher based on your location. For example, Florida homeowners are at much greater risk of damage caused by hurricanes, storm surges, and sinkholes than anywhere else in the country.
The problem is that many homeowners aren’t aware of the risks they face and may not get appropriate insurance coverage. This is particularly common with sinkholes and other “earth movements.” Many homeowners assume that something as dramatic as a sinkhole swallowing their home should automatically be covered by insurance, but this isn’t the case.
The last thing you want to find out after a sinkhole has destroyed your home’s structural integrity is that your policy doesn’t cover the damage. Keep reading to learn when sinkholes are covered by insurance, how to tell if you have coverage, and what you can do if your insurer tries to deny your claim for covered damage.
When Are Sinkholes Covered by Insurance?
Most homeowners with insurance policies have what is known as “comprehensive” coverage. This means the policy covers damage from all sources except those specifically excluded. This is by far the best option in most cases because it significantly reduces the likelihood that the insurer can deny your claim.
However, it is important to read the exclusions on your policy carefully. Most policies automatically exclude damage caused by “earth movement,” which includes everything from earthquakes to mudslides to sinkholes. Insurers exclude this type of damage because it is often an extremely expensive issue to fix. Even minor instances of earth movement can structurally destabilize entire homes, requiring invasive repairs or tearing down the old structure and rebuilding from scratch. Including coverage for this damage would increase the cost of the policy and put the insurer at greater liability, so most exclude it as a matter of course.
As such, you cannot assume that your homeowner’s insurance policy covers sinkholes, even if it is comprehensive. Instead, you must read the policy carefully or review it with a skilled insurance lawyer. You will likely need a specific sinkhole or earth movement rider in addition to your standard policy to ensure your home is protected.
Florida and “Catastrophic Ground Cover Collapse”
While home insurers often exclude earth movement in their standard policies, some states mandate that they provide some form of coverage. For example, Title XXXVII. Insurance § 627.706 of the Florida Statutes requires all insurers to cover damage caused by “catastrophic ground cover collapse.” This is defined as:
- The abrupt collapse of the ground cover;
- A depression in the ground cover clearly visible to the naked eye;
- Structural damage to the covered building, including the foundation; and
- The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.
This covers certain severe instances of 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.
Because of the frequency of Florida sinkholes, the state does have one other requirement. All home insurance providers in the state must provide some form of optional sinkhole coverage as an endorsement or rider. However, you must acquire it before sinkhole activity is identified near your property, or your insurer can refuse to extend you coverage.
Pursuing Fair Remediation for Your Damaged Home
If you have Florida sinkhole insurance, you can file a claim if your home is damaged. However, your insurer may still try to deny you full coverage of your claim or force you to accept substandard remediation to receive compensation.
Why does this occur? During the claim process, the insurer will send an expert to your property to determine the extent of the damage and recommend a sinkhole remediation plan. This expert is being paid by the insurance company. They may therefore be biased in favor of downplaying the damage your home suffered or the extent of repairs and remediation necessary.
Suppose the engineer submits an inaccurate report or recommends insufficient repairs. In that case, the insurer will likely attempt to hold you to those recommendations by threatening to withhold funds if you do not agree to follow them.
If you rely solely upon the insurance company’s experts, you may not know that the repair was insufficient until your home is damaged further. For that reason, it is critical to seek experienced legal counsel before accepting any settlement offer for Florida sinkhole claims.
A knowledgeable insurance attorney can help you fight against unfair or insufficient settlement offers. According to Florida’s Second District Court of Appeal ruling in Roker v. Tower Hill Preferred Insurance Co., you have the right to challenge your insurer’s sinkhole remediation plan. Your attorney will help you identify if the plan is sufficient to repair your home according to your policy and negotiate or litigate the matter if it is not.
Contact Our Miami Sinkhole Insurance Law Firm
If a sinkhole has damaged or destroyed your home, you must take action immediately. At The Professional Law Group, we represent clients filing initial sinkhole coverage claims or disputing underpaid or denied claims. We have decades of experience pursuing fair compensation for our clients around Florida, and we are prepared to use that experience to help you receive the funds you need to repair your home. Schedule your case review today to discover how our sinkhole insurance attorneys can help you.