Sinkhole, Property Collapse & Earth Movement Insurance
Not all property policies are designed to offer regional and state-wide coverage for specific perils like Sinkhole, Property Collapse & Earth Movement Insurance. In certain states and territories, Flood, Sinkhole, Ground Subsidence, Mudslide, Earthquake, Windstorm, and Ground Movement are specifically excluded on a property insurance policy. Specialty programs and high-end insurance carriers may provide coverage for these specific perils, when available. Without adding specialty policy endorsements onto a property policy, dwelling and personal contents could otherwise be excluded if the loss is caused bean otherwise excluded peril. In order to adequately protect your family and property,it’s important to understand what your property does and does not cover.
Did you know?
- Earth Movement exclusionary language is commonly defined as “shrinking, settling, cracking, bulging, shrinkage or collapse of the ground surrounding or underneatha covered structure”
- Sinkhole Collapse is defined as physical damage “arising out of or caused by sudden settlement or collapse of earth supporting such covered property”. “The settlement or collapse must result from subterranean voids created by th exaction of water on limestone or similar rock formations”.
What does elected sinkhole coverage protect against?
Not all property insurance programs offer sinkhole coverage, but when sinkhole coverage is available and elected on the home policy, the insurance company will address underground repairs recommended by a professional engineer and performed by a pre-‐approved list of contractors. The insurance company will also approve any additional above-‐ground damage caused by the sinkhole repair. “Managed repairs” are typically agreed upon to avoid additional property damage or loss.
Florida law now requires coverage for "catastrophic ground cover failure," a more specific definition than the word sinkhole.
Unless otherwise stated, your insurance policy insuring your dwelling or structure does not apply to loss or damage caused by or resulting from:
- The sudden sinking or collapse of land into underground empty spaces created by the action of water on limestone or dolomite.
- The cost of filling land; or the sinking or collapse of land into man-‐made cavities. This Sinkhole Collapse exclusion does not apply to ensuing loss or damage caused by or resulting from a specified peril.
Although property insurance policies contain earth movement exclusions, the courts have reviewed coverage when the cause of the earth movement can be attributed to man-‐made activities, while excluding loss from natural events, i.e., earthquake, related earth sinking or shifting, or mudslide. For example, building damages caused by nearby blasting activities or excavation on an adjacent lot that resulted in settling, sinking, and cracks and separations in the foundations were considered to be man-‐ made activities and held to be covered, despite the earth movement exclusion.
Along with ‘ground movement’ comes the peril of Earthquake. Earthquake coverage is designed to protect the structural integrity of your home, other structures on your property, and your personal contents in the event of an earthquake. A minor earthquake can cause foundation, plumbing and electrical problems, and these can lead to other serious property damage such as collapse, explosion, fire, extensive water damage, or electrical arcing. Your home policy traditionally covers loss due to fire, water damage, or even explosion, even if the cause of the loss is due to an earthquake. It’s important to note, there are insurance companies that include a policy exclusion rescinding coverage on property and contents damage unless a separate earthquake policy is in place, prior to the loss. Some earthquake policies exclude traditional brick veneer construction. If seismic activity is not proven to be a factor in the property loss, and the risk of structure collapse is imminent, actions are required by the property owner to move, clear or demolish the damaged structure.
There are viable solutions and specialty coverages available to address regional risks that may exceed the coverage capacity of your property policy. State-‐by-‐state guidelines differ, but there are percentage deductibles based off of the replacement cost value of one’s dwelling; 1%, 2% or 5%. This deductible applies separately to each coverage amount for your house and other permanent structures, but with such complexities, it’s important that you discuss Sinkhole, Property Collapse & Earth Movement Insurance coverage specifics with your agent.
Swingle, Collins & Associates specializes in Sinkhole, Property Collapse & Earth Movement Insurance personal property and casualty insurance coverage in Dallas, Southlake, Highland Park, and Plano. The descriptions of coverage listed on this website are brief and subject to the provisions, limitations, and exclusions that can only be expressed in your policy and related endorsements. For additional information of how Swingle, Collins & Associates can assist in meeting your Sinkhole, Property Collapse & Earth Movement Insurance coverage needs for property and casualty insurance please contact your dedicated risk manager to discuss the benefits and services of personal homeowners insurance coverage.
The information contained on this page is provided for informational and educational purposes only. It contains general information on insurance issues and may not reflect the most current developments in insurance coverage and is unlikely to apply in all factual scenarios. The information does not include all the terms, coverage, exclusions, limitations or conditions that may be contained in the actual insurance contract language. The policies themselves must be read for those details. Sample policy forms will be made available upon reasonable request.