You must meet all 4 criteria for your insurance to kick in for catastrophic ground collapse. The house must be condemned.
Non-catastropic covers you if your house is not condemned.
“Catastrophic ground cover collapse” is defined as “geological activity that results in all of the following: 1). The abrupt
collapse of the ground cover; 2). A depression in the ground cover clearly visible to the naked eye; 3). Structural damage
to the building including the foundation; and 4). The insured structure being condemned and ordered to be vacated by
the government agency authorized by law to issue such an order for that structure.”
This means that if your home is damaged by sinkhole activity, but does not meet all four criteria for catastrophic ground
cover collapse – for instance, you may have foundation cracks, but the home is still livable – your insurance may not pay
for the damage if you do not have sinkhole coverage.
All insurance companies licensed to do business must offer sinkhole coverage, usually as an addendum or rider to an
existing policy, and for an additional premium charge. However, insurance companies may require an inspection before
extending coverage. If sinkhole activity is present on the property or within a certain distance of the property to be
insured, the insurance company may decline coverage.
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