Does Homeowners Insurance Cover Sinkholes?
Homeowners spend on average $1250 per year on home insurance, which translates to just over $100 per month. This amount is responsible for a dwelling coverage of between $300K and $400K. A dwelling coverage or insurance is the amount of money that will be used to rebuild or take care of some of your home’s repair costs after it has been damaged.
Generally, a homeowner’s insurance will cover damage against vandalism, fire, and natural disasters such as floods, hailstorms, and wind. However, unusual occurrences like sinkholes have started appearing on the list thanks to climate change and global warming. This article will walk you through what you need to know about home insurance and sinkholes.
What Are Sinkholes?
Sinkholes are a type of depression on the earth’s surface that can range from a few feet to several acres in size and from less than a foot to hundreds of feet deep. They form when water erodes bedrock or soil, creating a cavity beneath the ground. As the cavity grows, the ground above it collapses into it, forming a sinkhole. Sinkholes can occur anywhere there is bedrock or soil, but they are most common in areas with high rainfall like Florida.
Naturally, sinkholes occur due to rising temperature, which increases the ability of water to dissolve rocks. Besides that, lowering groundwater levels may leave behind gaping holes that will result in sinkholes. Lastly, if there are loose particles between rocks and rainwater or an underground river system carries them away, the cave left behind may collapse into a sinkhole.
Sinkholes are also caused by human activities such as irrigation, which may deplete underground water. Additionally, heavy construction projects jeopardize the integrity of rocks resulting in the formation of sinkholes.
How Do You Identify a Sinkhole Before a Disaster?
Sinkholes are rare in most parts of the USA but common in Florida, Texas, Missouri, Alabama, and Kentucky. You will also find them in places near the Appalachian mountain ranges, such as Tennessee, or areas such as Tulsa, Oklahoma, where carbonated karst is almost 40% of the earth.
If you are from one of these areas, you can identify a sinkhole by:
- A shallow depression that forms suddenly
- A series of cracks in pavement
- An inexplicable drop in well water level
- A small opening in the ground that appears to be swallowing rainwater
Does Homeowners Insurance Cover Sinkholes?
Sinkholes are a serious problem that can cause damage to your home and property. According to USGS, sinkholes have been accounting for over $300 million per annum in damage in the USA in the last 15 years. Unfortunately, sinkhole incidences are also increasing steadily. In Florida, for the past half a century, they have been increasing at a staggering rate of 1–3% for every rise in 3 degrees Fahrenheit.
While you may think that your homeowner’s insurance will cover the cost of repairs, you may be surprised to learn that most policies don’t actually cover sinkholes. In general, there is an exclusion clause for natural disasters such as storms or earthquakes on many homeowners’ policies, but it is not clear whether or not a sinkhole would qualify as one. In fact, many insurance companies won’t even offer coverage against sinkholes.
For example, Allstate Insurance offers coverage against floods and mudslides but doesn’t include protection from any natural phenomena other than those two types of events. The same goes for Geico Insurance; they offer coverage against earthquakes but not any other type of natural disaster like flooding or sinking earth.
What to Not Do When a Sinkhole Appears
From their definition, sinkholes are terrifying. They can result in death or the destruction of property. If you experience a massive hit from a sinkhole, there are some things you should not do:
- Don’t ignore the problem and hope it will go away—this will only make things worse. Instead, call authorities and start planning for evacuation.
- Don’t try to fix the problem yourself. Since some sinkholes are over 100 feet deep and may cover the entire neighborhood, this is not your problem. Find a safe escape route and move away from the problem.
- Don’t wait for too long to call your insurance company. They may not cover the damage.
The Law and the Disclosure of Sinkholes
Are homeowners required to disclose geological features such as sinkholes before selling a property? Unfortunately, the answer is not always clear. Some states have laws against mandatory disclosures about the presence of sinkholes in property sales information, which means that you might not know about a potential sinkhole until it’s too late.
But in Florida, for instance, the statute requires real estate brokers or anybody responsible for the transfer of a home’s ownership to disclose information about the potential for sinkholes. If it doesn’t happen, the lease or purchase agreement may be rendered void.
Sinkholes are a natural phenomenon that can happen anywhere in the world. They can occur suddenly or over time and often cause extensive property damage. While most homeowner’s insurance policies don’t explicitly cover sinkholes, many policies will provide coverage for damage caused by earth movement.
So, if you live in an area prone to sinkholes, it’s important to check with your insurer to see what kind of coverage you have.
Featured Image Credit: Simunovic, Shutterstock