Florida is known for many things: hurricanes, alligators, and even sometimes the title “Florida Man.” But one of the country’s biggest risks is hidden underground: sinkholes.
If you own property in Florida, you may be wondering how potholes affect your insurance coverage. Does your homeowners policy cover them? Is catastrophic land cover collapse the same thing as pothole insurance?
In this article we will compare cover of holes against catastrophic collapse of the ground coverexplain the differences and help you understand what your policy may and may not cover.
What are holes?
If you’ve just moved to Florida, you may not be familiar with these geological disasters. They’re just another part of life in the Sunshine State.
A sinkhole is a depression in the ground caused by the collapse of the underlying structure. Florida is situated on limestone, a type of porous rock that can wear away as water moves through it. When water seeps into the ground, which happens often during many summer thunderstorms, the slightly acidic water begins to dissolve the limestone.
As more cracks appear, the surface area of the limestone increases and more water rushes in to dissolve it. After enough time has passed, the remaining limestone may not be strong enough to support the ground above it, causing the surface to collapse.
This is just one way sinkholes can form. Drought, well drilling, excessive groundwater withdrawals, and other factors can make sinkhole activity more likely.
Some holes are small enough to damage a shed or playhouse. Others are large enough to swallow entire buildings. They can happen gradually or suddenly, and the damage can cost hundreds of thousands of dollars to repair.
Pothole warning signs
Unfortunately, there’s not much you can do to prevent a hole from opening up in your property. However, you can watch for warning signs so you can react before the damage becomes more serious.
Some warning signs of a developing sinkhole include:
- Cracks or cracks in the foundation
- Doors and windows that no longer close properly
- Drooping vegetation
- Cracks, pools or holes in the ground
If you notice any of these red flags on your property, contact a professional as soon as possible. Depending on what’s going on under your home, certain steps can help reduce further damage and keep your family safe.
Does my homeowners insurance policy cover potholes?
With so much at stake, you might be wondering if pothole damage falls under your insurance coverage.
The short answer is: sometimes.
Since 2007, all home insurance policies in Florida have been required to include catastrophic ground collapse coverage. This may include some sinkhole-related losses, but does not cover every type of sinkhole damage. To get wider protection, you may need to purchase pothole insurance at an additional cost.
Covering a hole against catastrophic collapse of the ground cover
The two terms may sound similar, but there are important differences between sinkhole coverage and catastrophic collapse coverage.
As with many insurance policy matters, fraud and abuse have led insurance companies to make a clear distinction between standard catastrophic coverage for ground collapse and broader sinkhole insurance.
Let’s look at the main differences between the two.
Catastrophic collapse of the land cover
Catastrophic ground collapse coverage is included in Florida homeowner’s insurance policies.
However, your claim must meet four requirements before your insurance company will reimburse you for your loss:
- The sudden collapse of the land cover
- A depression in the soil cover that is clearly visible to the naked eye
- Structural damage to the insured building, including the foundation
- The insured structure has been condemned and ordered released by the government agency authorized by law to issue this order
again all four of these conditions must be met the loss to be considered a catastrophic land cover collapse. If only some of these conditions are met, you will likely need separate pothole insurance to apply cover.
Pothole insurance
A sinkhole insurance policy covers structural damage to the insured building, including the foundation, caused by sinkhole activity. A sinkhole is generally defined as the subsidence or systematic weakening of land caused by the movement of soil, sediment, or rock into underground cavities created by water dissolving limestone or similar rock.
Because sinking policies cover a wider range of claims, they can be much harder to find. There is enough pothole activity in Florida that many insurers do not offer this type of coverage at all. When pothole insurance policies are available, they often come with deductibles of 10% or more of the insured home’s value.
This increased deductible does not apply to catastrophic collapse coverage.
Do I need both?
When comparing sinkhole coverage against catastrophic land cover collapse, the difference comes down to how wide the coverage is.
Pothole insurance is much broader than coverage for catastrophic soil collapse. It can cover damage that does not meet the strict requirements for catastrophic land cover collapse. However, because coverage is broader, it can also be more expensive and harder to obtain.
Catastrophic ground collapse coverage does not cover every sinkhole loss, but it can provide protection in very severe situations where a home is directly affected by a major collapse.
The best place to start is by reviewing your homeowners insurance policy to find out what is covered and where there may be gaps.
Insurance policies are not always easy to read. If you’re not sure what your policy covers, talk to your insurance agent or carrier. They can explain your coverage and help you determine if additional pothole coverage makes sense for your situation.
What about commercial property insurance?
Potholes aren’t just a problem for homeowners. They can also pose serious risks to commercial property owners and business operators in Florida.
Damage to an office building, shopping center, warehouse or other commercial property can disrupt business operations, create safety concerns and result in costly repairs. Depending on the extent of the damage, businesses may also face temporary closures, lost income or costly structural rebuilding.
Commercial property policies do not deal with pothole losses in the same way. Coverage depends on policy language, endorsements, and the type of loss involved. Some businesses may have limited protection against catastrophic ground collapse, while wider pothole coverage may require additional approvals or specialist coverage.
If you own commercial property or operate a business in an area with known pothole activity, it’s worth reviewing your insurance policy with your agent. Understanding your coverage before a loss occurs can help you avoid unexpected gaps and ensure your property is properly protected.
Conclusion
The threat of potholes can be frightening. The good news is that they are relatively rare, and many reported sinkholes occur in Hernando, Pasco, Hillsborough and Pinellas counties. Here in Central Florida, alligators and hurricanes are often a greater threat to personal property.
For added peace of mind, consider checking your address against the Florida Department of Environmental Protection Map of subsidence incident reports to see potholes that have occurred near you. If you live in an area with high pothole activity, it may be worth looking into additional pothole insurance.
And if you have questions about auto insurance, life insurance, renters insurance, commercial property insurance or home insurance in general, contact our offices to learn more. With over 30 years of experience in the Orlando insurance market, we have the knowledge and experience to help you.
We can’t wait to meet you!
