Key Takeaways
- Florida law requires insurers to offer sinkhole coverage on residential property policies
- Catastrophic ground cover collapse is covered by default in all property policies
- Full sinkhole coverage is optional and covers settling and structural damage from sinkholes
- Sinkhole claims require testing and certification by a professional engineer or geologist
- Specific disclosure requirements apply when offering or denying sinkhole coverage
Florida Sinkhole Coverage Requirements
Florida has unique sinkhole coverage requirements due to the state's geological conditions. Sinkholes are a significant risk in many parts of Florida.
Types of Sinkhole Coverage
Florida law distinguishes between two types of sinkhole-related coverage:
Coverage Comparison
| Coverage Type | Required? | What It Covers |
|---|---|---|
| Catastrophic Ground Cover Collapse | Yes - Mandatory | Visible hole, structural damage, condemned property |
| Sinkhole Coverage | Offered - Optional | Settling, structural damage, testing costs |
Catastrophic Ground Cover Collapse (CGCC)
Catastrophic Ground Cover Collapse is covered by default in all property policies:
CGCC Definition
For coverage to apply, ALL of these must occur:
- Abrupt collapse of ground cover
- Depression clearly visible to naked eye
- Structural damage to building requiring repair
- Building condemned and ordered vacated
Exam Tip: CGCC requires ALL four elements. If the structure is not condemned, CGCC coverage does not apply.
CGCC Coverage
- Included in all residential property policies
- Cannot be excluded
- No additional premium required
- Limited to the four-element definition
Full Sinkhole Coverage
Sinkhole Coverage provides broader protection:
What's Covered
| Covered | Description |
|---|---|
| Sinkhole Activity | Settlement or movement from sinkhole |
| Structural Damage | Foundation and building damage |
| Testing Costs | Professional engineer/geologist testing |
| Stabilization | Required repairs to foundation |
Availability
- Insurers must OFFER sinkhole coverage
- Policyholder may accept or reject
- Additional premium required
- Higher deductibles common (10% of dwelling coverage typical)
Claims Process
Florida has specific requirements for sinkhole claims:
Testing Requirements
All sinkhole claims require:
- Professional Testing: By licensed engineer or geologist
- Certification: Neutral evaluation of sinkhole activity
- Report: Written findings provided to insurer and insured
- Neutral Evaluator: Selected by parties if disputed
Claims Timeline
| Step | Requirement |
|---|---|
| Initial Report | Policyholder reports potential sinkhole |
| Inspection | Insurer inspects within 45 days |
| Testing | Professional testing ordered |
| Results | Provided within reasonable time |
| Decision | Accept or deny based on testing |
Disclosure Requirements
Florida requires specific disclosures:
Before Purchase
- Explanation of CGCC vs. sinkhole coverage difference
- Premium for sinkhole coverage if offered
- Deductibles that apply
- Any coverage limitations
After Claim Denial
If sinkhole coverage claim denied:
- Written explanation required
- Copy of testing report
- Right to dispute findings
- Neutral evaluation option
High-Risk Areas
Some Florida counties have higher sinkhole risk:
Sinkhole Alley
Central Florida counties with high sinkhole activity:
- Hillsborough
- Pasco
- Hernando
- Citrus
- Marion
- Polk
Note: Insurers may have different underwriting standards in high-risk areas.
Policyholder Responsibilities
Policyholders claiming sinkhole loss must:
- Report activity promptly
- Allow insurer access for inspection
- Cooperate with testing
- Make repairs as required (if coverage applies)
- May be required to use repair funds for actual repairs
What type of sinkhole coverage must be included in all Florida property policies?
Who must perform testing for Florida sinkhole claims?