Sink hole insurance

[glgene]

I have read conflicting stories on sink hole insurance. So, my questions ---

1) Is it available for purchase of resale homes, or new homes only?

2) Are there different levels of coverage?

3) If available for purchase, is the premium based strictly on the value of the home? What kind of insurance co$t might apply?

4) What is the frequency in TV does sink holes happen?

5) Anything I missed?

Gene

[Bogie Shooter]

I have read conflicting stories on sink hole insurance. So, my questions ---

1) Is it available for purchase of resale homes, or new homes only?

2) Are there different levels of coverage?

3) If available for purchase, is the premium based strictly on the value of the home? What kind of insurance co$t might apply?

4) What is the frequency in TV does sink holes happen?

5) Anything I missed?

Gene

That's probably what you will have is "coflicting stories" unless you talk to a insurance agent. Typically on TOTV you will get many opinions that most likely will be in conflict.
I suggest you call The Villages Insurance and pose your questions to them.
866-556-0706

[jnieman]

I have read conflicting stories on sink hole insurance. So, my questions ---

1) Is it available for purchase of resale homes, or new homes only?

2) Are there different levels of coverage?

3) If available for purchase, is the premium based strictly on the value of the home? What kind of insurance co$t might apply?

4) What is the frequency in TV does sink holes happen?

5) Anything I missed?

Gene

There is a huge article answering most of your questions in the POA (property owner's association) Property Owners, Association of Florida (http://www.poa4us.org) bulletin which is put in everyone's driveway yesterday. Very informative.
If you can get sinkhole insurance from your carrier, it is wise to buy it. Yes there are quite a few sinkholes in Florida because of the limestone. From my last inquiry I've heard that The Villages Insurance is offering sinkhole insurance for new builds. You may be able to get it from others if you pay for an inspection, but it is difficult to obtain. Do some research on Catastrophic Ground Collapse. Insurance companies here include it in their homeowner's policies.

[jimbo2012]

Gene, I made the calls, only on new.

figure about $700 all in.

[asianthree]

make several call for your insurance

[glgene]

Gene, I made the calls, only on new.

figure about $700 all in.

Jimbo, are you saying an addt'l $700 a year for sinkhole insurance? In reference to your "all in," what does that mean? Only new construction is eligible for coverage? (I would think existing insurance holders would be grand-fathered.)
But for someone buying a pre-owned home today, are they simply... $hit out of luck?

Gene

[jimbo2012]

Jimbo, are you saying an addt'l $700 a year for sinkhole insurance? In reference to your "all in," what does that mean? Only new construction is eligible for coverage? (I would think existing insurance holders would be grand-fathered.)
But for someone buying a pre-owned home today, are they simply... $hit out of luck?

Gene

No not addt'l total of $700 w full sinkhole on new builds.

Not available I was told by 3 brokers on re-sales.

So it appears to me that yes SOL on pre-owned.

[kathy and al]

I just got off the phone with my insurance agent because I was curious about Jimbo2012's comment that sinkhole insurance was not available for preowned homes. I was told, as Jimbo2012 mentions, that sinkhole coverage is now next to impossible to get in the Villages for preowned homes although the Catastrophic coverage continues to be offered. I personally have the sink hole coverage in my current policy but the agent advises me that come renewal (1/1/13) that coverage will not be offered any longer. He advises that there are a handful of companies that are still offering the coverage but sees them also eliminating sink hole in the near future.
Could be that it will be impossible to cover for sinkhole in the future and he concluded that "fraudulent claims" were the catalyst for dropping this coverage by most insurance companies. We'll have to see what happens but at this point in time I guess everything is on a strictly individual basis.

[glgene]

Don't quite understand why "new" homes would still qualify for sinkhole ins. coverage, but not "resales." What is the logic for different treatment? I would think new homes would be more vulnerable...but I'm not an expert <g>.

Gene

[jnieman]

Don't quite understand why "new" homes would still qualify for sinkhole ins. coverage, but not "resales." What is the logic for different treatment? I would think new homes would be more vulnerable...but I'm not an expert <g>.

Gene

If you click on the link on my earlier post it will solve lots of your questions. There is a huge article in the POA bulletin and it has a question and answer session. Not sure about why they will insure new builds. I worked for an insurance company up until about a month ago. Part of my job was fielding questions about sinkhole insurance. There is so much speculation out there about why they insure this and not that. I found the article in the POA bulletin to be right on with every answer.

[KEVIN & JOSIE]

I just got off the phone with my insurance agent because I was curious about Jimbo2012's comment that sinkhole insurance was not available for preowned homes. I was told, as Jimbo2012 mentions, that sinkhole coverage is now next to impossible to get in the Villages for preowned homes although the Catastrophic coverage continues to be offered. I personally have the sink hole coverage in my current policy but the agent advises me that come renewal (1/1/13) that coverage will not be offered any longer. He advises that there are a handful of companies that are still offering the coverage but sees them also eliminating sink hole in the near future.
Could be that it will be impossible to cover for sinkhole in the future and he concluded that "fraudulent claims" were the catalyst for dropping this coverage by most insurance companies. We'll have to see what happens but at this point in time I guess everything is on a strictly individual basis.

If it is no longer available, what is an owner to do if they have damage to their home, but can't afford the high out of pocket costs to repair?

[Nancy D.]

I have read conflicting stories on sink hole insurance. So, my questions ---

1) Is it available for purchase of resale homes, or new homes only?

2) Are there different levels of coverage?

3) If available for purchase, is the premium based strictly on the value of the home? What kind of insurance co$t might apply?

4) What is the frequency in TV does sink holes happen?

5) Anything I missed?

Gene
I am told by several insurance companies that we deal with that you can get "catastrophic ground collapse" coverage. They don't call it sinkhole coverage anymore because people kept filing claims for step cracking on concrete block, which occurs in normal settling. So
most insurances companies, if not all, say "we don't have sink hole coverage, we have catastrophic ground collapse coverage." We use several great insurance companies who can help you with answers to the rest of your questions. Pleae let me know if you need some contact info for them.

[jnieman]

I am told by several insurance companies that we deal with that you can get "catastrophic ground collapse" coverage. They don't call it sinkhole coverage anymore because people kept filing claims for step cracking on concrete block, which occurs in normal settling. So
most insurances companies, if not all, say "we don't have sink hole coverage, we have catastrophic ground collapse coverage." We use several great insurance companies who can help you with answers to the rest of your questions. Pleae let me know if you need some contact info for them.

Catastrophic ground collapse insurance is not exactly the same as sinkhole insurance. Your home must be uninhabitable for the catastropic ground collapse insurance to kick in that means you have to lose your certificate of occupancy. If your driveway sinks or your yard or even if you get cracks and sinking in your foundation as long as you can live in it it's not covered without regular sinkhole insurance.

[jnieman]

Catastrophic ground collapse insurance is not exactly the same as sinkhole insurance. Your home must be uninhabitable for the catastropic ground collapse insurance to kick in that means you have to lose your certificate of occupancy. If your driveway sinks or your yard or even if you get cracks and sinking in your foundation as long as you can live in it it's not covered without regular sinkhole insurance.

Sinkhole and Catastrophic Ground Cover Collapse Insurance in Florida : Property Insurance Coverage Law Blog (http://www.propertyinsurancecoveragelaw.com/2010/02/articles/insurance/sinkhole-and-catastrophic-ground-cover-collapse-insurance-in-florida/)

An easy quick article that explains it all

[784caroline]

Nancy D is Wrong...its not just semantics there are very specific differences between Catastrophic Ground Cover Collapse and Sink Hole Coverage. All Florida Homeowner policies MUST have Catastrophic Gound Cove Collapse UNLESS you specificaly waive in writing such coverage. Read jineman's posts...they are much more accurate.

From reading Nancy D's (first) post It sounds like she is a broker or insurance agent of some type.......suggest she gain a better understanding of a very a very sensitive subject.

[kathy and al]

If it is no longer available, what is an owner to do if they have damage to their home, but can't afford the high out of pocket costs to repair?
As the old saying goes: "Your SOL" and believe me-the insurance companies will be very happy not to have to process your claim.

[janmcn]

If it is no longer available, what is an owner to do if they have damage to their home, but can't afford the high out of pocket costs to repair?

Since I don't have the $250,000 to repair a hole in my yard, I would just have to change my identity and walk away.

[Chipper]

Does the fact that Sinkhole Ins. will not be available cause prospective buyers to reconsider buying in TV? I know that damage from a sinkhole is slim as is being hit by a tornado, but I still have coverage for tornado damage.

[another Linda]

Our insurance company is St. Johns and we just dealt with this yesterday on our villa north of 466. The sink hole coverage we had last year was automatically cancelled for every policy but we could reinstate it if 1) there were no sink holes within some radius (not sure what that was), and 2) our foundation showed no cracks. The company did the survey for 1) at no charge to us. If we passed that, then we would pay for the inspection for 2). Unfortunately the survey showed there were sinkholes in the radius. I'm currently trying to find out how close.

[784caroline]

Chipper.....the problem with obtaining sinkhole insurance is not just a Problem in The Villages BUT all of Florida

[784caroline]

Another Linda....even if you go through those hoops to get sinkhole insurance, I would bet your minimum deductible would be 10% of property insured value ...so for a $200,000 insured property that $20,000 out of pocket before the insurance company evens starts to pay.

Decide you are wiling to take that risk before you make additional outlays to get the inspection reports. If you can get it, its still probably worth the cost.

[Chipper]

I understand that the sinkhole problem concerns all of Florida. I have family in the Tampa area that will lose their coverage next year. I'm wondering if the lack of coverage is a factor in buying property in TV (or Florida).

[Carla B]

Don't quite understand why "new" homes would still qualify for sinkhole ins. coverage, but not "resales." What is the logic for different treatment? I would think new homes would be more vulnerable...but I'm not an expert <g>.

Gene

Maybe the developer has some influence over the number and age of the homes that will be covered. I wouldn't get too comfortable thinking my new home would continue to be insured beyond the first year or two. When you move in, it is no longer "new", it is preowned.

[aljetmet]

I'm concerned as well. I live in a burb of Memphis. When we bought our house we were told by the bank that we needed to earthquake coverage. We have it with 10% deductible. it's not cheap either

Turns out the last quake just north of us was a 100 years ago and created Reelfoot Lake. (The Mississippi went backwards for three days) Supposedly these quakes come every 100 years or so.

Our house can't be sold soon enough!

Funny thing I expect our home insurance in TV (with any sinkhole coverage we can get) will be half what we pay in Memphis and our new designer will be much higher in cost than we are selling our current house

[KEVIN & JOSIE]

I understand that the sinkhole problem concerns all of Florida. I have family in the Tampa area that will lose their coverage next year. I'm wondering if the lack of coverage is a factor in buying property in TV (or Florida).

Unfortunately it has stopped us at this time. The purpose of having insurance is to protect you from the rare unexpected. Just can't afford to take such a risk with such a large investment at this point of my life. Maybe the future will get brighter.

[terrieb]

I understand that the sinkhole problem concerns all of Florida. I have family in the Tampa area that will lose their coverage next year. I'm wondering if the lack of coverage is a factor in buying property in TV (or Florida).

We were considering buying in Florida but have decided not to because of the issues with sink holes as well as the deductible offered by some insurance companies into the thousands of dollars before insurance would kick in. It is enough of an issue for us to not even consider moving to Florida but visiting and renting instead.

[jimbo2012]

I feel the odds R in your favor, maybe a better chance of lighting to hit U.

You can as of now get the full coverage on NEW, it may not last forever.

But if you had to go out of pocket you can get a second mortgage perhaps as an option.

I would imagine it would be a tax deductible loss.

Moreover if it's not covered loss it means you can live in the home.

[villages07]

There are risks everywhere... Earthquakes in California, floods in river zones, wildfires out West, hurricanes in FL, LA, and TX, and yes sinkholes in FL.

As Jimbo pointed out, your basic homeowners covers catastrophic ground collapse, so, if your home is uninhabitable, you are covered.

If a sinkhole occurs on your land but is not significant enough to make the house unlivable, then sinkhole insurance covers you. Without it, you have to make any necessary repairs on your own.

It's all calculated risks and what keeps you from sleeping at night.

[KEVIN & JOSIE]

We were considering buying in Florida but have decided not to because of the issues with sink holes as well as the deductible offered by some insurance companies into the thousands of dollars before insurance would kick in. It is enough of an issue for us to not even consider moving to Florida but visiting and renting instead.

I think the renting is wise. That way, you can walk away and go back to your home.

[Ron1Z]

We also have put our plans on hold due to no coverage. We were down in July after the heavy rains and all everyone was talking about was how they were going to protect there investments??

[goodgrief]

Had no problems getting sinkhole and gound coverage south of 466a. We have been with USAA for 30 years. I think ASI was the underwriters for it. Policy is all wrote up now just waiting for close :)

[GatorFan]

If you can see the sinkhole it is catastrophic ground collapse. Condemned means that the county will require you move until repairs are made because until repaired your home is not safe. If you have a kitchen fire, the county is going to condemn your propery until the electric wiring is repaired because your home is not safe to live in. same thing.

Sinkhole, you can not see it. You may have some cracking in concrete, hairline cracks in stucco, etc. my parents always called that settling and cracking. Today people say I think I have a sinkhole.

Bottom line, if it is a catostropic group collapse the deductible is the same as if you have a fire, wind, lightning, theft, etc claim which is usually $500 or $1000 deductible.

Live and enjoy life. Worrying about a sinkhole vs catostropic ground collapse is in my opinion not something I choose to do.

[784caroline]

goodgrief

Believe it or not You are not insured by USAA. ASI is a cooperating agency that USAA is using as a convience for its members to provide homeowners insurance in Florida. USAA (the company) is NOT writing any new homeowners insurance in Florida with the exception of active duty military whose primary residence is in the state of FLorida.

What this means to you is USAA is not taking a financial risk with your policy, and the financial backing of your insurance policy is dependent on ASI's financial credit. If a claim occurs, USAA will still provide its adjusters (not ASIs) to resolve the claim.

Given the circumstances we have in the State of Florida its not a bad deal....but you are not insured by USAA. I have USAA and from what I hear ASI homeowners policy is more reasonable in price...cannot tell if its comparable.

Just curious what is your sinkhole deductible with ASI...with USAA its 10% of policy coverage. Ground collapse is $500.

[dkrhardy]

I see some folks saying that they cannot get sinkhole insurance, hmmmm. We closed 4 weeks ago and we got it. We are North of 466A and just West of BV.
Don & Kaz

[jnieman]

I see some folks saying that they cannot get sinkhole insurance, hmmmm. We closed 4 weeks ago and we got it. We are North of 466A and just West of BV.
Don & Kaz

From what I am hearing you can get sinkhole insurance on a new build. Not so easy on a used home at least not without an inspection which you may or may not pass depending on how far you are from a current sinkhole.

[784caroline]

I see some folks saying that they cannot get sinkhole insurance, hmmmm. We closed 4 weeks ago and we got it. We are North of 466A and just West of BV.
Don & Kaz

If it was a new build, you most likely can get it. Who provided your homeowners insurance that included Sinkhole coverage ..what was your deductible ? Make certain it was not simply Cat. Ground Cover collapse which all Fl homeowner policies have !

[goodgrief]

goodgrief

Believe it or not You are not insured by USAA. ASI is a cooperating agency that USAA is using as a convience for its members to provide homeowners insurance in Florida. USAA (the company) is NOT writing any new homeowners insurance in Florida with the exception of active duty military whose primary residence is in the state of FLorida.

What this means to you is USAA is not taking a financial risk with your policy, and the financial backing of your insurance policy is dependent on ASI's financial credit. If a claim occurs, USAA will still provide its adjusters (not ASIs) to resolve the claim.

Given the circumstances we have in the State of Florida its not a bad deal....but you are not insured by USAA. I have USAA and from what I hear ASI homeowners policy is more reasonable in price...cannot tell if its comparable.

Just curious what is your sinkhole deductible with ASI...with USAA its 10% of policy coverage. Ground collapse is $500.

I was just looking at that on the USAA site and yep you're right. Didn't even realized they had done that :( But guess its good they had someone they have there customers deal with.

Its $500 deductable for anything (sinkhole, ground collapse, hurricane damage, total loss etc...) We didn't get regular flood insurance because we're on higher ground, basically the whole neighborhood would have to be underwater to get us :). But we are covered for sewer issues or hole in roof type scenerio or pipe break. I think we were right at $730 for the policy. I thought it was very good and the house and contents are covered :) I really expected it to be higher with the sinkhole coverage but was pleasantly surprised :) As good as it gets with homeowners I suppose.

[allus70]

"If you have a current policy that has sinkhole insurance, you are grandfathered
in, but if you change insurance companies…BYE BYE
Currently NEW homes in The Villages South of CR466A are being allowed the coverage just as
an additional cost, no inspection required.
BUT, for Pre-Owned you are required to have a geophysical test which is about $7500 and even
if it is OK you still may not get it. http://www.sinkhole.com/deniedsinkholeclaim/sinkholetesting/
Also, if you have so much as a hairline crack in any cement you are disqualified, also if there is
or has been a sink hole within a mile of your home you are disqualified." Lyle Gant

This has been a source of concern for us. What are the chances of your house being destroyed by a sinkhole? I'd say pretty low, BUT there still is a chance. Thing is, if it were to happen, that would be it. I could hardly afford to repair both my house and a sink hole without insurance.

Another concern is that if you were interested in purchasing a pre owned home and wanted sinkhole protection, you would be on the hook for a 7-10K geological test. Even if your house passed that test, if a sinkhole were to occur within 1 mile, the new owner would not be able to purchase insurance.

If you purchase new, yes, insurance is available without a test. Still,if you were to sell, it becomes a pre owned and the above conditions apply.

We were absolutely sure that TV was the place were were going to wind up in within the next year or two. We still want very much want this to happen, but this whole controversy has left room for some doubts.

If anyone sees this differently, or is aware of a solution of some sort is in the works, please let us know.

[jimbo2012]

There is a possibility that the FL state insurance laws will change in the future, but you can't name too many places if any, that natural disasters don't occur or are fully insured.

Alternatively you can buy new with insurance, and if you had a problem selling use the property as an investment rental (even can mortgage it out ). :ho:

[GatorFan]

You are not grandfathered in. Companies can drop sinkhole coverage on renewal and require an inspection for sinkhole coverage.