Sinkhole Insurance?
 

Hello all, we are moving to TV in June and are currently shopping for homeowners insurance. Is a sinkhole endorsement a smart inclusion? Please provide your reasoning. Thank you and we look forward to meeting many of you.

Yes, it is. All Florida policies will include, by law, "catastrophic ground collapse" coverage, that will cover sinkhole damage only if the house is damaged and declared uninhabitable and condemned by the local government. But, "sinkhole" coverage will cover damage caused by a sinkhole where there may be only minor damage to the house, but the house is not condemned.

The additional coverage can be hard to find as most insurers will not offer it. Considerable $$$ damage can be done without the house being uninhabitable, so as with most insurance add ons it’s what you feel is necessary. The Villages Insurance has navigated me to and through numerous insurers as needed throughout the 18+ years here.

If your home is destroyed you are covered. If a whole opens up in your yard and your home is livable you are only covered if you buy a supplemental policy.
I would avoid living close to ponds as the weight of the water and a slow leak could cause a sink hole.
I would skip the supplemental insurance as long as the area I was in did not have a history of sinkholes.

Note that sinkhole insurance will only cover damage to your house. It will not cover damage to your yard, driveway, sidewalk, pool, or anything else outside the perimeter of your house. So, if there is a 10 foot hole in your driveway, but your house foundation is not damaged, you are not covered by either sinkhole or catastrophic ground collapse insurance.

Well stated, true and I think not understood by many. DYODD, understand your coverage and deductible.

Correct! Many don't understand this.

And sinkhole coverage has a huge deductable. I believe it's a percentage of your dwelling coverage.

That said, unless you are in an area with recent occurances of sink holes, I would not waste my money. There was a case many years ago in Marion County where a home adjacent to a pond that was having sink hole problems was damaged to the point where it was condemed and the catastrophic ground collaplse covered that.

I wouldn't waste my money here in the Villages with flood insurance either unless you have a pond in your yard that can rise and flood your home.

No. Too costly. Most likely if your house is damaged by sinkhole it will be condemned and thus covered by insurance. That was the case with two houses in Calumet Grove. Also, these houses had drainage line that ran from street to retention pond between them. I would avoid buying houses situated next to drainage lines.

We added it to our policy last year after there were several issues in or near our area, it wasn’t that expensive and we sleep well at night.

IS THIS TRUE -"Note that sinkhole insurance will only cover damage to your house. It will not cover damage to your yard, driveway, sidewalk, pool, or anything else outside the perimeter of your house. So, if there is a 10 foot hole in your driveway, but your house foundation is not damaged, you are not covered by either sinkhole or catastrophic ground collapse insurance." I was under the impression from an ins agent that catastrophic ground collapse covered your home if damaged and sinkhole covered your property such as a hole in the yard........PLEASE COMMENT

I was talking to a customer at McDonalds at Magnolia plaza, he was in the business of sink hole remediation (basically they pump a cement slurry into the sink hole) - he said there are a lot of sink holes in TV area. State Farm provide sink hole insurance, it was reasonably priced in my opinion.

what is the typical cost for this?

Also, there is a 10% deductible. So if your home is worth $400,000, there is a $40,000 deductible.

Being new to FL and sinkholes we were able to add it by having the home inspected for an additional $199 charge that also included a roof inspection. I think it was called a 4 point inspection and the insurance company chose the inspector. We did not have to replace our 15 year old roof but I think we will have to revisit that again in another 5 years. After living here and checking into sinkhole history it seems there have been sinkholes caused more often by leaking water and sewer lines. That happens in every city. Natural sink holes also seem to be more likely near ponds and lakes. Just search the internet and you should find maps of sink holes around Florida and this area. I think we will be dropping the sink hole coverage for the reasons others have mentioned here. It ran us about $330 a year extra so that would be nice to remove from the bill. I'm sure the amount will vary by carrier and home value, etc.

This is us
 

We are closing on the 11th and I had this same question. After a very long conversation with our agent, we chose to not have sinkhole coverage. I was informed as others have said, that it's unlikely even with coverage, that you will file a claim and it was 10% of the home value to file.

Let me put it this way:
Are you still buying car insurance even though you have never used it before?
Are you buying medical insurance even though you aren’t sick?
Are you buying home insurance even though you have never needed it?
If you answered yes, then you have your answer. You never need your insurance until the day you do.
do you want to be protected or want to save a little bit each year?

Our friends were visiting one claim adjuster, and spouse runs their insurance office.

Both made a statement that may hold true to some homes.

Catastrophic sinkhole could be enough insurance for homes. There is so little property on each lot that doesn’t have a structure built, sinkhole could impact some areas of the home, that catastrophic could come into play.

You didn’t mention whether you’re moving to a new home or into a home that is a few years old. I moved into a new home and because of all the ground disturbance during construction and not knowing what the area looked like in terms of dry streams, drainage, etc. before construction, my insurance professional suggested that we purchase the sinkhole insurance and keep it for at least 2-3 years. At that time we can reevaluate based on whether there are other issues in our local area.

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It is true. Ask your insurance agent for a copy of the company's sinkhole endorsement document. You can read for yourself what it covers. When I was shopping for sinkhole insurance, I found that many insurance agents did not have a clue about what their sinkhole endorsement covered.

I have insurance with Progressive and I am attaching a copy of my sinkhole endorsement document. It states that only the "principal building" is covered, not the "other structures". I think this is typical in Florida. My annual cost for the endorsement is $145.

Of course they are going to say that. They want to sell you insurance.

At the end of the day, Insurance is something we all need but some insurance like sink hole and flood in our area in the Villages is a total waste of money. There are some corner cases where if you live near a pond or up in Marion County where there has been a recent history of issues, you may want to consider it. Also, remember, when insurance is cheap, that means the insurance company feels its a low risk.

My cost is $145 per year, with a deductible of 10 percent of the house value.

That’s not too bad. I dropped ours as the endorsement was, as I recall just over $500 and then 10% of A - meaning for $500+ I was only protecting myself for the portion of the cost exceeding $48000.

I think State Farm quoted differently. Their endorsement was less, but their all perils deductible (including optional sinkhole) was 2% - $9500ish. That was a couple of years ago. They now will not write a new policy on a pre-‘21 home.

Car insurance is required by law, home insurance is required by the mortgage company.

That is the answer. How does that relate to the not required sinkhole coverage?

Sink Hole insurance
 

Like any insurance, you only need it, when you need it. The difference between catastrophic land collapse (CLC) and Sink hole (SH) coverage as follows, what happens to the land is the same, it collapses into the ground. When this happens the State inspectors come in. The difference is the cause. Test are then conducted and if the collapse is determined to be caused by a limestone formation below the earth's surface it is a sinkhole. If you don't have that coverage you get nothing, zero. Even though all companies offer (CLC) insurance. Sink holes are rare, CLC more frequent. So, like I said earlier you only need it when you need it.
Now I had one home owners policy and they like other posters said, had a 10% deductible, or about $35,000. Crazy, but that's what most have. Except I found that State Farm includes there (SH) deductible into a single deductible for all. I selected a $1000 deductible, which applies to all of my deductible items, including (SH). You can pick your deductible. I pay $2264 for home owners in TV.

We had new construction over two years ago. There were depressions in the Village that were remediated to the tune of $180K each before the homes were sold. So we got the extra sink hole coverage through State Farm which requires an inspection. State Farm has the lowest cost and deductible for this type of coverage. We'll keep it for at least several years.

Do you have the name of the company?

Does anyone have any idea what Sinkhole remediation would cost (not Catastrophic Ground Collapse). I have a deductible of $32,000 which seems like it would pay for fixing most sinkholes. My foundation is a slab of concrete.

In addition, most insurance companies require an inspection before they issue sinkhole coverage. If you pass inspection, you can get coverage and if you don't pass, you can't get coverage.

It would seem to me that if you can get coverage, there must be very little risk that you will have sinkhole damage. And if you can't get coverage, there is probably a much higher chance of having sinkhole damage.

Think about it. $145 per year is so low that the insurance company feels it's not very likely to happen.

If sink hole occurance were of a higher probability, you would be paying a lot more.

Kind of like flood insurance. Here in the Villages you can get flood insurance for about $250 for example while the people living on the coast pay thousands.

The main point is people think sink hole insurance covers a sink hole happening in your driveway or front lawn for example when it actually only covers the principal residence structure.

In about 2009 or 2010 I met a lady from Glenbrook who was having sinkhole repairs done on her home, using her sinkhole endorsement. She said, had she not had sinkhole coverage, the repairs would amount to $100,000+ out of pocket. We carried it for 15 years with ASi/Progressive until 2023, when they doubled the cost of our HO insurance and then some ($1676 to $3539). No claims except for a palm tree struck by lightning in 2017. So we had to find another insurer.

Then, they wondered why we dropped them?

My sinkhole premium is about $400 and I pay the first $32,000 of any repairs.

It is tough getting accurate information from insurance companies on sinkhole coverage. I will call some companies that repair sinkholes and see if I can get a ballpark idea on how much it would cost to fix a sinkhole.

Note that, if you have sinkhole insurance coverage, it will only kick in if you have foundation damage to your house. In that case, pumping concrete slurry into the sinkhole will not repair the foundation damage or any other damage to your house.