On May 17, 2011, Florida Gov. Rick Scott signed legislation allowing insurance companies to shorten the window for filing sinkhole damage claims and to limit sinkhole coverage to primary residences. While some applaud the legislation as a barrier to fraudulent sinkhole claims, consumer advocates see it as a blow to homeowners with sinkhole-damaged property.
Common in Florida, sinkholes are depressions in the ground that can grow to be as deep and wide as 40 to 60 feet. They are created when ground water dissolves soil or rock beneath the surface and the surface collapses into the resulting void. In rural areas sinkholes present little danger, but a home falling into a large hole in the ground is dangerous to both people and property.
Sinkholes can cause many types of damage to homes, including cracks in the foundation and driveway, damage to interior and exterior walls as well as problems with doors and windows. In extreme cases, sinkholes have swallowed entire homes.
Buying a Home in Sinkhole Country
When buying a home in a sinkhole-prone region, homebuyers must familiarize themselves with their prospective homeowner's insurance policy and riders. Sinkhole coverage is not mandatory in Florida and the limits on sinkhole claims are tighter as of May 17th. Moreover, while some policies may cover damage from "catastrophic ground cover collapse," sinkhole damage may be excluded (yes, the two are legally different). However, no Florida home should be without sinkhole insurance coverage.
Before purchasing a home, potential buyers should hire an independent sinkhole inspector to check for common signs of sinkhole activity. Not only will an inspection provide a true assessment of a home's condition and value, but will also provide an insured with the information commonly required to secure sinkhole coverage. Not all homes are insurable, but an inspection will help provide a definitive answer as to whether your new home is or is not eligible for homeowners insurance that covers sinkhole damage.
Sinkholes can cause catastrophic damage to homes. A pre-purchase sinkhole inspection and a review of a homeowner's insurance policy are critical to protecting a home financially. Sinking one's savings into an uninsured home, only to have the home sink into a giant hole is a financial risk no one should take. A Florida sinkhole attorney can explain the risks of purchasing sinkhole property as well as the ins and outs of your homeowners insurance policy.
