Sinkhole coverage, and the two things it might mean
This is the most misunderstood coverage in Florida property insurance, because two different things share the word, and only one of them is included in your policy.
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- Catastrophic ground cover collapse, which every Florida property policy must include
- Sinkhole loss coverage, which is optional, priced separately and far broader
- Testing and engineering costs, which are substantial and are part of the coverage question
- Stabilisation and repair of the structure, subject to the policy's process
Collapse versus loss, and why the difference is everything
Catastrophic ground cover collapse is mandatory and narrow: it requires an abrupt collapse of the ground, a visible depression, structural damage to the building and a condemnation by a government agency. A house that is cracking as the ground slowly subsides meets none of those tests. Sinkhole loss coverage is the optional endorsement that answers that case, and in the counties where the ground actually does this, it is the coverage that matters.
What moves the premium
- Your county, and this one is not marketing: Hernando, Pasco and Citrus sit over the most active area in the state, and Miami-Dade does not.
- The age and construction of the building, and any prior claim on the address.
- The inspection, which several carriers require before adding the coverage.
- A separate sinkhole deductible, commonly a percentage of the dwelling limit.
A prior claim follows the address, not the owner
A property with a sinkhole history is underwritten on that history whoever owns it now, and the repair records matter more than the disclosure. If you are buying in an affected county, ask for them before closing rather than discovering them at the quote.
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I am in Miami-Dade. Should I buy it?
Almost certainly not, and we will say so. The mandatory collapse coverage you already carry is the appropriate answer here, and the optional endorsement is money spent on a risk this ground does not present.
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