Wording in property insurance excludes sinkhole coveraage

[CSwofford147@comcast.net]

In a hand out from the State of Florida it states( How do I know whether my policy excludes sinkhole coverage. Policies that exclude sinkhole coverage will have the following wording on the Declarations page: Your policy provides coverage for a catastrophic ground cover collapse that results in the property being condemned and uninhabitable. Otherwise, your policy does not provide coverage for sinkhole losses.
You may purchase additional coverage for sinkhole losses for an additional premium.) The statement that you can purchase additional coverage for sinkhole losses is a fraudulent statement. In order to purchase sinkhole coverage you must have the property inspected and to my knowledge there are very few properties that pass. The criteria is based on all most solely in the Villages on the score on the Sinkhole Index. It goes from 0 to 800 with 800 being the most impacted by ground subsidence activity. I your home is to my knowledge within a couple of miles of sinkhole activity you will receive a rating of 700 and will get a letter that you home is uninsurable. I have never gotten a definitive answer as to how close your home has to be to sinkhole activity to be denied insurance but is my understanding that there are very few homes in the Villages that pass. This denial of insurance is based on the location of the property and it is known to the inspection company and the insurance agent before they go out on these inspections that the property is uninsurable. If you have sinkhole damage and have the wording in your policy stated above and your home is damaged but not condemned by the county authorities you will be responsible for the cost of all damages. This can easily run between $100,000 and $200,00 dollars. This information is known to the Villages when they sell you homes but they withhold this material fact because they think it will be bad for business.

[BobnBev]

I have sinkhole insurance, and haven't gone thru any of that.

[justjim]

Insurance legislation regarding sinkholes may be needed in Florida to protect homeowners. Why could you get sinkhole insurance on a new home and not a resale? It seems to me the "risk" to an insurance company would be the same.

Something doesn't add up.

[janmcn]

Insurance legislation regarding sinkholes may be needed in Florida to protect homeowners. Why could you get sinkhole insurance on a new home and not a resale? It seems to me the "risk" to an insurance company would be the same.

Something doesn't add up.


It's the Florida Legislature that got us in this mess in the first place when they passed the law in 2012 allowing for this new term "catastrophic ground collapse" as opposed to the all encompassing term sinkhole. Since this law was passed, sinkhole claims have dropped by 80%, I just read in The Tampa Bay Times editorial yesterday. Guess who was behind this law?

[Bucco]

It's the Florida Legislature that got us in this mess in the first place when they passed the law in 2012 allowing for this new term "catastrophic ground collapse" as opposed to the all encompassing term sinkhole. Since this law was passed, sinkhole claims have dropped by 80%, I just read in The Tampa Bay Times editorial yesterday. Guess who was behind this law?

The law is far from perfect....that I will agree with.

However, as always, we forget all of the fraud and abuse of the insurers by contractors and adjusters in the past. Folks were actually putting large additions on their homes with sinkhole payoffs from insurance companies.

It is not the best law, for sure, we continually get upset with people in lawmaking simply trying to stay ahead of the fraud, and the lawyers who are just waiting to "put it to the man" !!!


If there are other ways to stop the fraud and robbery of insurers, let us hear it. One way is be stricter with builders, but you can just imagine what that would do to home prices.

OP blames the Villages....the last post blames the state. It is the fault of those folks who think they deserve somebody elses money and the lawyers who help find the way !

I guess my major point is that the law is geared to insure the damage is actually from sinkholes and that the money paid is used to fix the sinkhole, not to put in an addition to the home.

Why we never blame the tax frauds, the welfare frauds, etc.....just beyond me. They have all our legislators running to catch up with the latest scam, and we still blame the insurers because they were scammed. They sure are not saints but why do we never call it what is is. Situations caused by people trying to beat the system.

[Steve9930]

The law is far from perfect....that I will agree with.

However, as always, we forget all of the fraud and abuse of the insurers by contractors and adjusters in the past. Folks were actually putting large additions on their homes with sinkhole payoffs from insurance companies.

It is not the best law, for sure, we continually get upset with people in lawmaking simply trying to stay ahead of the fraud, and the lawyers who are just waiting to "put it to the man" !!!


If there are other ways to stop the fraud and robbery of insurers, let us hear it. One way is be stricter with builders, but you can just imagine what that would do to home prices.

OP blames the Villages....the last post blames the state. It is the fault of those folks who think they deserve somebody elses money and the lawyers who help find the way !

Your post is write on target. After my Insurance Company Dropped the Sink Hole and changed it to Catastrophic Ground Collapse I was furious. But after researching the problem I understand their point of view. The amount of fraud was unbelievable. So if you want to be angry about what is now law be angry at the right people. Catastrophic Ground Collapse will still fix the problem. Also homes that are fixed correctly are probably the safest in the area.

[ilovetv]

In a hand out from the State of Florida it states( How do I know whether my policy excludes sinkhole coverage. Policies that exclude sinkhole coverage will have the following wording on the Declarations page: Your policy provides coverage for a catastrophic ground cover collapse that results in the property being condemned and uninhabitable. Otherwise, your policy does not provide coverage for sinkhole losses.
You may purchase additional coverage for sinkhole losses for an additional premium.) The statement that you can purchase additional coverage for sinkhole losses is a fraudulent statement. In order to purchase sinkhole coverage you must have the property inspected and to my knowledge there are very few properties that pass. The criteria is based on all most solely in the Villages on the score on the Sinkhole Index. It goes from 0 to 800 with 800 being the most impacted by ground subsidence activity. I your home is to my knowledge within a couple of miles of sinkhole activity you will receive a rating of 700 and will get a letter that you home is uninsurable. I have never gotten a definitive answer as to how close your home has to be to sinkhole activity to be denied insurance but is my understanding that there are very few homes in the Villages that pass. This denial of insurance is based on the location of the property and it is known to the inspection company and the insurance agent before they go out on these inspections that the property is uninsurable. If you have sinkhole damage and have the wording in your policy stated above and your home is damaged but not condemned by the county authorities you will be responsible for the cost of all damages. This can easily run between $100,000 and $200,00 dollars. This information is known to the Villages when they sell you homes but they withhold this material fact because they think it will be bad for business.

Several things wrong with this. First, unless the TV sales reps are licensed insurance agents, they cannot legally tell you what kind of insurance coverages you could get on a particular property, nor can they tell you what would be denied or written by a particular insurance company. This would be misrepresentation.

Secondly, when we bought our resale home and were getting ready for closing several years ago, we called on The Villages Insurance (independent agency owned by TV) at LSL, to get the homeowner insurance quote.

They quoted us American Integrity Ins. Co. of FL, and one of the first things they pointed out in all the supplemental coverages THEY automatically built into the quote was "Sinkhole" coverage. I did not ask for it and in fact, I had to ask what it was for when they listed all the supplemental coverages they automatically quoted.

Attached here are photos of our same policy we've had since purchase, and these photos are of pertinent sections of the renewal policy we paid for last month.

Page 1 lays it out clearly "The definition for "Catastrophic Ground Cover Collapse" has been further defined, and changed to restrict coverage to the "Principal Building."...... See below.

In my opinion it is telling that the o.p.'s TOTV member stats page includes Class Acton lawsuit correspondence from the head of the POA, mentioning Class Action lawsuit potential now for sinkholes.

See actual policy coverages and language in policy renewed last month:

First photo shows "Sinkhole" coverage = "Yes" and the added premium for that is $249 (well worth it!!!)

https://www.talkofthevillages.com/forums/attachment.php?attachmentid=38877&stc=1&d=1398277969

https://www.talkofthevillages.com/forums/attachment.php?attachmentid=38878&stc=1&d=1398277969

This is PAGE 1 of the renewed insurance policy, and it couldn't get any more clear than this:
https://www.talkofthevillages.com/forums/attachment.php?attachmentid=38879&stc=1&d=1398277969

[graciegirl]

It's the Florida Legislature that got us in this mess in the first place when they passed the law in 2012 allowing for this new term "catastrophic ground collapse" as opposed to the all encompassing term sinkhole. Since this law was passed, sinkhole claims have dropped by 80%, I just read in The Tampa Bay Times editorial yesterday. Guess who was behind this law?

Just as Bucco says. Read here from The Tampa Bay Times the abuse of the prior laws from people using the insurance money from the State for friviolous things.
Sinkholes become Florida's latest insurance disaster | Tampa Bay Times (http://www.tampabay.com/news/sinkholes-become-floridas-latest-insurance-disaster/1208473)

[Golfingnut]

Wow. Never too old to pick up on a tip of how to protect oneself. Thanks Bucco

[janmcn]

Just as Bucco says. Read here from The Tampa Bay Times the abuse of the prior laws from people using the insurance money from the State for friviolous things.
Sinkholes become Florida's latest insurance disaster | Tampa Bay Times (http://www.tampabay.com/news/sinkholes-become-floridas-latest-insurance-disaster/1208473)


The insurance companies have a fiduciary responsibility to protect themselves and their shareholders from waste, fraud and abuse. Since they are unable or unwilling to carry out that responsibility, they are now allowed, by the FL legislature, to punish people who never commited any fraud by not providing them with sinkhole insurance (other than the catastrophic ground coverage).

What other states have natural disasters; ie tornadoes, floods, earthquakes, fires, mudslides, etc, that are not insured?

If posters on here think it's no big deal to write out a check for $200,000 to $300,000 to cover a sinkhole in their yard, so be it. That's what the homeowners in Buttonwood would have had to do if they hadn't had sinkhole insurance.

[Bucco]

The insurance companies have a fiduciary responsibility to protect themselves and their shareholders from waste, fraud and abuse. Since they are unable or unwilling to carry out that responsibility, they are now allowed, by the FL legislature, to punish people who never commited any fraud by not providing them with sinkhole insurance (other than the catastrophic ground coverage).

What other states have natural disasters; ie tornadoes, floods, earthquakes, fires, mudslides, etc, that are not insured?

If posters on here think it's no big deal to write out a check for $200,000 to $300,000 to cover a sinkhole in their yard, so be it. That's what the homeowners in Buttonwood would have had to do if they hadn't had sinkhole insurance.

WOW...you went right by the underlying situation here, and took the road many travel because it is easier...not right or correct, but just easy, and just as an aside...most of the critique comes from a political movement, not logic or goodness.

I am not in anyway a defender of any insurance company and recognize their lobby power.

However, this entire thing is a result of insurance companies being bilked over years in this arena.

You are not alone in saying this bill is not the best, but the astronomical amounts of money being "stolen" from them demanded some action.

No different than classes being held openly on how to defraud tax or welfare, and when the call comes to tighten everything up, we blame NOT those who caused the tightening, but those who want reform.

When folks were actually prosecuted for these scams, certain groups were outraged at insurance companies even questioning them.....hard to imagine but true.

There are two sides to all stories, and it's time we hear both before deciding that it is those "dirty, rich money grabbers". All of those May fit at times, but we need to stop with knee jerk political responses, listen and read before we espouse our opinions.

I offer no answer to this, but I DO understand what CAUSED it to happen, and hope someday we think in terms of who was actually the root cause, and HELP in weeding them out and punishing them

Those who practice this knee jerk reaction to situations like this need to understand it is ALWAYS the good hardworking folks who suffer, while those who cause the reforms are defended and protected.

I am a bit sensitive to this genre, having witnessed first hand those who "school" in stealing from our welfare programs, and then receiving passionate defense for their actions in certain quarters.

As an after thought, Citizens Property Insurance in 2009 paid EIGHTY FOUR MILLION dollars in losses. In 2010, they received THIRTY TWO MILLION dollars in premiums and the costs associated with those premiums was TWO HUNDRED FORTY FIVE MILLION dollars. Staggering losses and the law would not allow an increase in premiums more than 10% a year, but finally in 2011, sinkhole coverage was exempted from that cap.

[graciegirl]

The insurance companies have a fiduciary responsibility to protect themselves and their shareholders from waste, fraud and abuse. Since they are unable or unwilling to carry out that responsibility, they are now allowed, by the FL legislature, to punish people who never commited any fraud by not providing them with sinkhole insurance (other than the catastrophic ground coverage).

What other states have natural disasters; ie tornadoes, floods, earthquakes, fires, mudslides, etc, that are not insured?

If posters on here think it's no big deal to write out a check for $200,000 to $300,000 to cover a sinkhole in their yard, so be it. That's what the homeowners in Buttonwood would have had to do if they hadn't had sinkhole insurance.

You can't get blood out of a turnip. You cannot have people use up the State's fund for this serious and much needed insurance for frivolous purposes and not change the laws. EVERYONE suffers when this happens. We can't keep spending spending spending and not have virtuous people cheated. I think that the legislature did the only thing it could do. We are all still covered for the very kind of terrible thing that happened in Buttonwood. But we can't get money for minor cracks and not house threatening events. Bucco explained it far better than I could. And so did the link I posted from the Tampa Bay Times. I think you were trying to politicize this issue.

[ilovetv]

The insurance companies have a fiduciary responsibility to protect themselves and their shareholders from waste, fraud and abuse. Since they are unable or unwilling to carry out that responsibility, they are now allowed, by the FL legislature, to punish people who never commited any fraud by not providing them with sinkhole insurance (other than the catastrophic ground coverage).

What other states have natural disasters; ie tornadoes, floods, earthquakes, fires, mudslides, etc, that are not insured?

If posters on here think it's no big deal to write out a check for $200,000 to $300,000 to cover a sinkhole in their yard, so be it. That's what the homeowners in Buttonwood would have had to do if they hadn't had sinkhole insurance.

Not every area or community of the country participates in the federal flood insurance program:

DHS FEMA NFIP Services - eWaterwark (http://www.nfipiservice.com/watermark/helping.html)

To be compliant with the NFIP, a community must adopt and enforce minimum floodplain management requirements within the SFHAs of the community. These requirements are designed to prevent new and substantially damaged or substantially improved existing development from increasing the flood damage potential and to protect development from future flooding.

FEMA urges all eligible communities to take the necessary steps to join the NFIP so that:

Property owners and renters may be approved for Federal disaster assistance;

Property owners and renters may obtain federally backed flood insurance; and

Future development in SFHAs is regulated to reduce the impacts of the devastating effects of flood disasters.

[Moderator]

Please stick to the topic of sinkhole insurance policies and avoid getting into political discussions. Please address the topic and not each other.

Moderator

[janmcn]

You can't get blood out of a turnip. You cannot have people use up the State's fund for this serious and much needed insurance for frivolous purposes and not change the laws. EVERYONE suffers when this happens. We can't keep spending spending spending and not have virtuous people cheated. I think that the legislature did the only thing it could do. We are all still covered for the very kind of terrible thing that happened in Buttonwood. But we can't get money for minor cracks and not house threatening events. Bucco explained it far better than I could. And so did the link I posted from the Tampa Bay Times. I think you were trying to politicize this issue.


Insurance companies are not using State's funds, unless you have your insurance with Citizens, which very few Villages' residents have.

People who do not have sinkhole coverage are not covered for the kind of terrible thing that happened in Buttonwood. The homes there have not been declared uninhabitable by a government official. Therefore, they would not qualify under the catastrophic ground coverage.

[ilovetv]

WOW...you went right by the underlying situation here, and took the road many travel because it is easier...not right or correct, but just easy, and just as an aside...most of the critique comes from a political movement, not logic or goodness.

I am not in anyway a defender of any insurance company and recognize their lobby power.

However, this entire thing is a result of insurance companies being bilked over years in this arena.

You are not alone in saying this bill is not the best, but the astronomical amounts of money being "stolen" from them demanded some action.

No different than classes being held openly on how to defraud tax or welfare, and when the call comes to tighten everything up, we blame NOT those who caused the tightening, but those who want reform.

When folks were actually prosecuted for these scams, certain groups were outraged at insurance companies even questioning them.....hard to imagine but true.

There are two sides to all stories, and it's time we hear both before deciding that it is those "dirty, rich money grabbers". .......

...Those who practice this knee jerk reaction to situations like this need to understand it is ALWAYS the good hardworking folks who suffer, while those who cause the reforms are defended and protected.

I am a bit sensitive to this genre, having witnessed first hand those who "school" in stealing from our welfare programs, and then receiving passionate defense for their actions in certain quarters.

As an after thought, Citizens Property Insurance in 2009 paid EIGHTY FOUR MILLION dollars in losses. In 2010, they received THIRTY TWO MILLION dollars in premiums and the costs associated with those premiums was TWO HUNDRED FORTY FIVE MILLION dollars. Staggering losses and the law would not allow an increase in premiums more than 10% a year, but finally in 2011, sinkhole coverage was exempted from that cap.

The problem that you cite, Bucco--the problem of spending more revenue than a business or government takes in--is a concept many people do NOT want to acknowledge. SOLVENCY is a concept many do not want to know about.

The other concept people reject is that ALL premium payers suffer when the insurer's revenues and required reserves are less than the amounts needed to pay ALL claims....including the claims of those who are honest and do not scam nor leech off the honest payers. And so the scammers prevail and ruin it for the honest ones.

[Bucco]

Insurance companies are not using State's funds, unless you have your insurance with Citizens, which very few Villages' residents have.

People who do not have sinkhole coverage are not covered for the kind of terrible thing that happened in Buttonwood. The homes there have not been declared uninhabitable by a government official. Therefore, they would not qualify under the catastrophic ground coverage.

Interesting.....can you breakdown the carriers and the percentage of those in The Villages who use them ?

Thanks

[Bucco]

The problem that you cite, Bucco--the problem of spending more revenue than a business or government takes in--is a concept many people do NOT want to acknowledge. SOLVENCY is a concept many do not want to know about.

The other concept people reject is that ALL premium payers suffer when the insurer's revenues and required reserves are less than the amounts needed to pay ALL claims....including the claims of those who are honest and do not scam nor leech off the honest payers. And so the scammers prevail and ruin it for the honest ones.


Yes, solvency seems to be a dirty word, but THAT is what lead to this kind of wording in the new law, but nobody wants to hear any of that

[coolkayaker1]

I am confused by the fraud portion of the argument that the gov't and insurers have for either charging a large added premium or not insuring sinkholes.

Isn't a sinkhole--or documented damage from unstable ground--quite obvious to the insurance adjusters or the homeowners (and their attorneys)?

Please help me understand the fraud part of the equation. Thanks.

[Bucco]

I am confused by the fraud portion of the argument that the gov't and insurers have for either charging a large added premium or not insuring sinkholes.

Isn't a sinkhole--or documented damage from unstable ground--quite obvious to the insurance adjusters or the homeowners (and their attorneys)?

Please help me understand the fraud part of the equation. Thanks.

"Over the years, a significant, unexplained increase in sinkhole claims has happened in the Sunshine State. The Florida Office of Insurance Regulation found that sinkhole costs jumped from $209 million in 2006 to $406 million in 2009.

Some insurers speculate fraudulent claims were to blame for this increase. According to the Florida Insurance Council, some policyholders often would file sinkhole claims because of minor cracking in walls and foundations -- and then use their claim settlements to pay other bills instead of fixing their homes. Dishonest public adjusters may have contributed to the problem by encouraging exaggerated claims and then taking a cut of the insurance payout, according to the American Consumer Institute Center for Citizen Research."

Read more: New Florida law takes aim at sinkhole fraud (http://www.netquote.com/home-insurance/florida-sinkhole-insurance.aspx#ixzz2zkoOFlNY)

There are other stories, but the bottom line is that the insurance companies were taking a real beating, premiums versus payouts, and were restricted in that they could not raise rates more than 10% (this has been changed in the last few years to exempt sinkholes.

This will explain a bit about the premise of the law...

"Basics of the new law

The law seeks to cut down on sinkhole fraud and abuse of the system by:

" Defining the "structural damage" that insurers are required to cover. Previous laws required insurers to cover structural damage, but did not define it precisely. This let policyholders file claims for minor damages that may or may not have been sinkhole-related.
Creating time limits for filing claims. Policyholders now are limited to two years to file claims for suspected sinkhole damage. That leaves policyholders "more than enough time to assess damage and file claims," according to the American Insurance Association. This part of the law is intended to prevent a policyholder (perhaps encouraged by an unscrupulous adjuster) from filing a claim for a crack in the wall that appeared many years ago.
Making homeowners pay for testing. It can be difficult and expensive to prove that damage was caused by a sinkhole. Therefore, insurers often paid claims rather than spend the time and money to perform conclusive tests. The new law requires homeowners to notify an insurer within 60 days after a claim denial if they want a test performed. That homeowner then must pay half of testing costs, up to $2,500, under the law. If the test uncovers a sinkhole, the insurer must refund those costs."


Read more: New Florida law takes aim at sinkhole fraud (http://www.netquote.com/home-insurance/florida-sinkhole-insurance.aspx#ixzz2zkp1xgun)


And this will spell out some pros and cons...

"Pros and cons

Opponents are concerned that the law favors insurers rather than consumers. In a July 2011 letter to the state's Office of Insurance Regulation, Florida state Sen. Mike Fasano called the law "the single most consumer unfriendly piece of legislation which was signed into law this decade."

Supporters, however, argue that questionable claims have been bleeding the industry dry and eventually would have caused premiums to spiral out of control. The law, according to the American Insurance Association, will "help to promote a competitive and vibrant insurance market."

Read more: New Florida law takes aim at sinkhole fraud (http://www.netquote.com/home-insurance/florida-sinkhole-insurance.aspx#ixzz2zkpT1qJR)


NOTE....I am not in the insurance industry, never worked in the insurance industry nor own stock in any insurance company.

My motivation for posting on this thread comes from the OP blaming The Villages, and another blaming the state legislature, instead of blaming those who bilk the system and make these kinds of things occur.

[Gat0r]

I can't believe that Citizens Property Insurance only made 32 million in 2009 they were the only place to get flood insurance in Florida. After Katrina I payed them over $5,000 a year for flood ins.They made more like 32 BILLION.All the homes that are on the water(lakes and ocean) have to have Citizens unless they are mortgage free.Maybe some of the claims for sink holes were fraudulent, they still investigated the damage and payed off.People didn't call them a say they had a sink hole and then they sent them a check for the price of there house.What do they do with the premium money,They invested it on wall street and probably doubled their money.

[Bucco]

I can't believe that Citizens Property Insurance only made 32 million in 2009 they were the only place to get flood insurance in Florida. After Katrina I payed them over $5,000 a year for flood ins.They made more like 32 BILLION.All the homes that are on the water(lakes and ocean) have to have Citizens unless they are mortgage free.Maybe some of the claims for sink holes were fraudulent, they still investigated the damage and payed off.People didn't call them a say they had a sink hole and then they sent them a check for the price of there house.What do they do with the premium money,They invested it on wall street and probably doubled their money.

Well, I do not know the insurance industry as well as you obviously do. I cannot only speak to the hearings on the new law and various news media sources.

A few years back, in Tampa, a number of articles on fraud associated with sinkholes.

If you know what you speak of, I will surely bow to your expertise but if you are correct, there should be an investigation. Even those opposed to the new law did not deny the fraud.

[Bucco]

Can you share the name of your insurance company with us all?
Thanks.

May I ask why ?

Not being a wise guy, but the OP took The Villages to task on the new law...and it is the new law that is the subject of the thread. In addition there is a move to get coverage away from Citizens and back into the private sector, since it will reduce the cost to our state

[Gat0r]

Citizens was the only insurance you could get for flood insurance in FL.All the other companies bailed out of FL after Katrina in 2005.If you live on the water you have to have wind,flood and home owners.So you have to get wind from one company flood from another and home owners from another.Any time large sums of money are moving there is fraud (Iraq)and dishonest people.The Great Wall of China was only as secure as the gate keepers honesty.

[Bucco]

Citizens was the only insurance you could get for flood insurance in FL.All the other companies bailed out of FL after Katrina in 2005.If you live on the water you have to have wind,flood and home owners.So you have to get wind from one company flood from another and home owners from another.Any time large sums of money are moving there is fraud (Iraq)and dishonest people.The Great Wall of China was only as secure as the gate keepers honesty.

And your point about the language in the new law ????????

[vinnie]

Assuming you have sinkhole insurance with 10% deductible, then if your home is appraised at 300k on your tax bill, then you are responsible for the first 10% meaning you have to pay for first $30,000.
If the damage is $40,000, you still pay 30k and insurance pays 10k.
If your neighbor has one in his yard or partially/totally destroys his house, then you are screwed anyway because why would anyone want to buy your house...being next to sinkhole
If you have a sinkhole in your yard, you are not covered.
If you do not have sinkhole insurance and your house is totally destroyed/uninhabitable, then you are complewtely covered without any 10% deductible.
I chose to take the gamble and not pay additional $450 in sinkhole coverage.
It is definitely a personal decision. You have to be able to put your head on the pillow at night. I just thought I would explain this sinkhole additional coverage....as it was explained to me.

[jaimeG]

A few years ago we would not even be having this discussion on sinkholes and coverages of sinkholes. Because almost all aspects of a sinkhole were covered under a standard policy not as an add on. Insurance company's are company's and they noticed they were paying out to much in claims money in Florida for sinkholes. They lobbied the state and influenced changes to the law concerning sinkholes. It was a major change to all home insurance policy's and now we have to live with it.

Sinkholes are everywhere in Florida and not going away any time soon. However that does not mean you are not protected or need the added sinkhole coverage on your policy. The Catastrophic Ground Cover Collapse (CGCC) on your policy covers your home and attached structures in the event of a sinkhole when your home is unsafe or condemned. I know that sounds scary but that's the coverage in Florida.

Now you can get an extra add on to your policy called sinkhole coverage. This a comprehensive coverage and covers damage that a sinkhole might cause that is not covered under the CGCC. Because this is an add on to a policy it does raise the price of your premium. It also has a minimum of a 10% deductible, which means a house that has a 300k policy limit has a 30k delectable. If any repair is under the deductible you will be responsible for the total bill. If you report a claim that is not under CGCC and under your sinkhole coverage the insurance company will inspect to verify that the damage is a result of a sinkhole. If your house is settling its not covered under sinkhole coverage. If you have any issues like crack in walls, they must be non maintenance and checked to see if its from a sinkhole.

To obtain the add on sinkhole coverage you must pay for an inspection up front and that is non refundable. If your house passes inspection you can still be denied if your area has has a sinkhole in the area. The insurance carrier determines the radius of the area they check.

If you make a claim on the policy for CGCC or sinkhole coverage the insurance company may non-renew you. And since the claim was on a sinkhole 99.9% insurance company's will not offer you a policy. Also the next buyers will have the same problem in finding coverage. So that will affect the sale of the property. Of course you can not avoid a claim when it comes to CGCC, that is when you should make a claim. Be aware of this because if you choose the add on coverage and use it for something you could of paid for or ignored it will have consequences.

However the sinkhole coverage might not be all its cracked up to be. With the lot lines the way they are in TV. The chances of a 100k or 200k in damages and not damaging the house to make it unsafe are almost impossible. Everyone needs to weigh the options and the pro's and con's. The extra coverage for sinkholes may not be worth adding to your policy. TV insurance adds the coverage on when they can, but they add it on at a cost. They are not including it and its not standard, remember commission is made on any add on to a policy. They should go over the pro's and con's of it with you. To an earlier post TV insurance is now TV insurance partners and is run by a Tampa agency. The Villages sold a stake to BKS-partnership hence the name change.

[bimmertl]

[QUOTE=vinnie;867110]Assuming you have sinkhole insurance with 10% deductible, then if your home is appraised at 300k on your tax bill, then you are responsible for the first 10% meaning you have to pay for first $30,000.
If the damage is $40,000, you still pay 30k and insurance pays 10k.

Your tax bill has nothing to do with your deductible. The deductible is based upon the amount of your dwelling coverage on your HO policy. Your tax bill is based upon the value of the house and lot. Typically your dwelling coverage reflects the cost of rebuilding your home and the value of the lot isn't included. So the dwelling portion of your HO policy is usually less than the "market value" of your house and is the basis for the deductible.

[Cathy H]

To clear the air here a little, does anyone have or know how to get insurance for restoration of your property even when a sinkhole does not affect your house but really messes up your driveway and your ability to sell your home in the future?

[janmcn]

To clear the air here a little, does anyone have or know how to get insurance for restoration of your property even when a sinkhole does not affect your house but really messes up your driveway and your ability to sell your home in the future?


If you have sinkhole insurance you would call your insurance company and they would send out an adjustor.

[looneycat]

Well, I do not know the insurance industry as well as you obviously do. I cannot only speak to the hearings on the new law and various news media sources.

A few years back, in Tampa, a number of articles on fraud associated with sinkholes.

If you know what you speak of, I will surely bow to your expertise but if you are correct, there should be an investigation. Even those opposed to the new law did not deny the fraud.

no, but they consistently pull up the amount paid for ALL claims when they are talking about fraudulent ones...that's nonsense, if you multiply the cost of the sinkhole rider times the number issued minus the claims paid out, the insurance industry made a huge profit. this was just a way to get more leverage to refuse claims.

[ilovetv]

no, but they consistently pull up the amount paid for ALL claims when they are talking about fraudulent ones...that's nonsense, if you multiply the cost of the sinkhole rider times the number issued minus the claims paid out, the insurance industry made a huge profit. this was just a way to get more leverage to refuse claims.

Does anyone really think writing sinkhole insurance in FL is "profitable"??

[perrjojo]

I have been reading all of the recent sink hole threads on TOTV. We recently went over our policy with our current insurer as well as a prospective new company. From my recent talks with two insurance companies I find that these threads have a lot of opinion but mostly misinformation. If you have concerns about sink holes and your policy, call your agent. If you don't like what your policy offers, call another agent. The insurance situation here is not nearly as complicated as some seem to think.

[GatorFan]

I have been reading all of the recent sink hole threads on TOTV. We recently went over our policy with our current insurer as well as a prospective new company. From my recent talks with two insurance companies I find that these threads have a lot of opinion but mostly misinformation. If you have concerns about sink holes and your policy, call your agent. If you don't like what your policy offers, call another agent. The insurance situation here is not nearly as complicated as some seem to think.

Thank you..you are 100% correct.

[quirky3]

Noticed that the OP has not participated after their original post