Tampa Palms, Westchase, Carrollwood and Tampa Bay Real Estate News From Jeanne Prigitano

I attended a discussion on Homeowner’s Insurance a few days back and was surprised by what I didn’t know. In particular, Florida Sinkhole Laws have changed effective January 1, 2011.

Insurance companies are allowed to renew homeowner’s insurance policies without Sinkhole losses as long as they cover “catastrophic ground collapse” and send out a notice in bold type 14 saying:

“YOUR POLICY PROVIDES COVERAGE FOR A CATASTROPHIC GROUND COLLAPSE THAT RESULTS IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN ADDITIONAL PREMIUM.”

So, why is that a problem? A catastrophic ground collapse is far different than a sinkhole. A catastrophic ground collapse essentially means your house is swallowed up. In most cases, a sinkhole can cause structural damage without the ground swallowing the house. Unless you have a sinkhole endorsement in your policy, regular sinkhole damage, which is by far the type of damage you will see the majority of times, is not covered.

Florida law provides that catastrophic ground collapse does not occur until all of the following four conditions have been met.

· There is an abrupt collapse of the ground.

· There is a depression in the ground cover clearly visible to the naked eye.

· There is structure damage to the building and its foundation.

· The structure is condemned to be vacant by the local government agency responsible for issuing condemnation orders.

I think now you see why I say most sinkhole problems do not “sink” to that level. Most sinkhole activity is caused by water on limestone and rock formations causing a weakening of the soil under the house. This can still cause cracking of foundations and other damage that will not be covered unless you also get a sinkhole endorsement.

I suppose what I am trying to say is read your insurance policy or contact your agent. I know that when I receive a renewal, I usually don’t read it. I take it for granted that I am getting the same coverage. Fortunately, I have a great agent who will notify me and even call and go over any changes or suggestions on ways to save money on my premiums. Even if you don’t live in Florida, check your policy. You might be surprised by what you didn’t know!