Cost of sinkhole coverage in Tampa, FL

Buying property in Tampa. No reported sink holes on the property, but it is within 1/2 mile of a reported sink hole. Is buying sinkhole insurance adequate protection and what is the cost?

Florida currently requires homeowners insurance policies and by extension insurance companies to offer coverage for what they call “Catastrophic Ground Collapse,” which may not actually cover damage caused by a sinkhole. Catastrophic Ground Collapse coverage differs from sinkhole insurance by requiring four standards be met before an insurance company will cover your loss:

• The ground collapse must be abrupt
• The depression of the ground cover must be clearly visible to the naked eye
• Structural damage must occur to the building covered on your insurance policy (this includes the foundation)
• The structure must be condemned and ordered to be vacated by the government agency authorized to issue such an order for that structure

If you sustain a sinkhole on your property but don’t meet those criteria, you could be faced with a financial catastrophe. Your home could be damaged, but not severely enough to warrant a “condemned” status, leaving you with a huge repair bill and no coverage.

Sinkhole insurance, on the other hand, does not require these same standards to be met before coverage applies for a loss, making it easier for homeowners to file a claim if their home is damaged. Although Catastrophic Ground Collapse coverage is automatically included in Florida and Tennessee homeowners insurance policies, customers can opt for broader coverage by adding a sinkhole coverage endorsement. This type of endorsement expands the Dwelling and Personal Property coverage on existing home insurance policies to include losses due to sinkholes. Unfortunately, sinkhole insurance can be quite a bit more expensive than a Catastrophic Ground Collapse endorsement depending on the location of your home and the risk associated with your area, so it is important to weigh your options and read the details of the policy carefully. It’s also important to remember as a homeowner that you have many options when it comes to home insurance, and the best way to find the right policy is to shop around with as many companies as possible. Ask lots of questions to make sure you are clear on how the policy handles various types of losses to avoid a major headache down the road. Good luck!