Your Florida State legislators are changing the rules about “Sinkhole Claims.”  This information is being presented to make you aware changes that could affect your policy.

Coverage on Sinkhole Claims Prior to August 2007 mandated that the insurance company pay for the consolidation of soils and/or foundation settlement caused by subsurface sinkhole activity that could not be ruled, as the reason for the damage, by the investigation of a geotechnical engineer.  That coverage was called COMPREHENSIVE SINKHOLE COVERAGE.  That comprehensive coverage is NO LONGER mandated.

Present Coverage on Sinkhole Claims is mandated only if your structure is affected by “CATASTROPHIC GROUND COVER COLLAPSE.”  That means, according to State Statute 627.706 Sinkhole insurance; catastrophic ground cover collapse

“…geological activity that results in all of the following:

• The abrupt collapse of the ground cover
• A depression in the ground cover clearly visible to the naked eye
• Structural damage to the building, including the foundation; and
• The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.”

The entire statute can be read here:
http://www.leg.state.fl.us/statutes/index.cfm?App_mode=
Display_Statute&Search_String=is&URL=Ch0627/Sec706.HTM

Anything less than the previous statements, is not mandated by the Florida State Legislature to be paid for by your insurance company.  In other words your house has to be deemed uninhabitable and you have to move out before your insurance coverage will come into play. Based on our experience, very few homes with sinkhole problems will qualify as “CATASTROPHIC GROUND COVER COLLAPSE.”

HOWEVER:  YOU CAN PURCHASE “COMPREHENSIVE SINKHOLE COVERAGE”

David Thompson CPCU, states in the “Education Library” article “Sinkhole vs. Catastrophic Ground Cover Collapse” the following information. 

“As a result of this statute,

• The carrier must now offer sinkhole coverage, and may charge and additional premium, and
• The 14-point, bold-font notice specified in the statute must appear on the policy.”

That means if you want “comprehensive sinkhole coverage” you must take the initiative to have it added to your policy.  The “premium” will be determined by the carrier based on where you live in the state.

WHAT CAN YOU DO?

Examine the interior and exterior of your home for signs of settlement damage.  Remember, the damage isn’t always severe at first.  Often times you will notice cracking along the exterior walls, separation of interior drywall or cracks in your floors. If you have any good faith basis to do so, file a claim with your insurance company for possible sinkhole activity. Filing a claim before your COMPREHENSIVE SINKHOLE COVERAGE lapses will effectively “GRANDFATHER” you in under the more favorable law and policy terms.

Feel free to contact us at 352-671-9191 to discuss these new changes in statutes as we would be happy to go over them with you.

Secure Foundation
Systems, Inc.
P.O. Box 1796
Ocala, FL 34478-1796
Phone: 352.671.9191
Fax: 352.671.9192