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Sinkholes and Ground Collapse | Homeowners Insurance

Be Aware of the Danger

Sinkholes are land forms created by the sinking of soil, sediment or rock as underlying layers are dissolved by groundwater. Sinkholes are generally found in limestone areas, notably in Florida. Conversely, ground collapse is the sudden settlement or collapse of earth that happens as a result of large voids created by the action of water on limestone or other rock formations.


What Does Sinkhole Insurance Cover?

Homeowner’s insurance policies that cover only catastrophic ground collapse will cover the cost of damage only under the following conditions:

  1. The abrupt collapse of ground cover
  2. A depression in the ground cover clearly visible to the naked eye
  3. Structural damage to the building, including the foundation
  4. The insured structure being condemned and ordered vacated by the government agency

If your home is damaged by a sinkhole, but does not meet all four criteria, your homeowners insurance policy may not pay for the damage unless you specifically have sinkhole coverage. Sinkhole coverage covers the circumstance where soil ravels into fractures created in underground limestone, causing a home’s foundation to settle unevenly. Sinkholes are generally not visibly apparent until you notice damage.

If You Have a Sinkhole Claim

If a portion of your home has shifted or sunk due to ground cover collapse, or if a sinkhole has appeared on your property, immediately take the following steps.

  • Ensure the safety of your family and evacuate if necessary.
  • Secure or remove valuable possessions.
  • Notify ARCW Insurance.
  • Notify your city or county building inspection department.
  • Mark the sinkhole or property with fencing, rope or tape to warn others of the danger. If someone is injured in the sinkhole, you could be liable.

Confirming the Presence of a Sinkhole

  • The insurance company may order a geological report that will establish the cause of damage and suggest how to prevent future damage. If testing confirms a sinkhole, your homeowners insurance policy should pay for the testing and repairs less deductibles.
  • Underground materials can cause damage that appears to be a sinkhole. Under certain circumstances, you may be held liable for a portion of the cost of repairs if testing proves the damage was not related to a sinkhole.

When Purchasing a Home

Before making this important investment, consider the following.

  • Ensure the house is insurable at a price you can afford.
  • Verify that sinkhole coverage is included in your policy as a rider. Ask ARCW Insurance for more details about your homeowners insurance quote.
  • Hire a home inspector who can help you identify signs of potential sinkhole activity.
  • Consider testing for sinkholes. Insurance companies should not require you to have this testing done prior to granting you coverage.
  • Your mortgage lender may require you to have your home inspected. Ask if the inspection addresses possible sinkhole activity, like cracks in the foundation or walls.



This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.  Should you have any questions or would like to discuss your company’s risk exposure with your group health insurance, please contact the insurance pros at ARCW Insurance.  We are here to help.