View the terrifying photos or videos of sinkholes swallowing homes, and even the low chance of one destroying your property or being injured by one may not be enough to deter you from buying sinkhole insurance. The chance of being affected by a sinkhole in any given year, as determined by researchers, is 1-in-100, according to the Insurance Information Institute, or III. The U.S. Geological Survey estimates that 35 to 40 percent of all the land in the U.S. is susceptible to sinkholes. Sinkholes are found all over the world, and in the U.S. they’re most common in Pennsylvania, Alabama, Missouri, Kentucky, Tennessee and Florida, according to the USG.

Pennsylvania has the second-highest rate of sinkholes, behind Florida. All of Florida is prone to sinkholes because its landscape is karst topography, which is basically dissolving bedrock, according to a USGS map of karst areas in the U.S. In January 2017, a 30-foot-wide sinkhole swallowed the front yards and part of a road in Cheltenham Township, PA. No one was injured, though a truck parked in a driveway dangled at the sinkhole’s edge.

What’s a sinkhole?

Sinkholes tend to form where underground water supplies dissolve rock, typically limestone. When the rock below the surface disintegrates, underground holes are created and the ground surface falls through.

Falling water tables and drought followed by sudden rain can also cause sinkholes. Droughts cause groundwater tables to drop, and areas that were once filled with water that supported the bedrock can weaken and collapse when soaked by rain.

They can also be caused by man-made forces such as excessive drilling, mining, hydraulic fracture mining, construction and heavy traffic. Abandoned coal mines over which development has occurred can also cause sinkholes.

Does homeowners insurance cover sinkholes?

Most homeowners insurance policies exclude earth movement such as sinkholes and earthquakes — from a small shift in the earth beneath the foundation of a building that can still cause severe damage, to a major sinkhole that swallows up an entire home.

Most property insurance policies exclude damage related to movement of the earth because the real estate value of the land is excluded when home insurance policies are priced. Property is insured for what it would cost to rebuild the structure, and the price of the land isn’t factored into the premium.

But many policies offer special endorsements or standalone policies for sinkhole coverage for an additional premium. Without the additional coverage, a homeowner wouldn’t receive compensation for their losses.

Comprehensive coverage in an auto insurance policy will cover loss or damage to a vehicle from a sinkhole, just as it would from fire, theft and falling objects.

Types of sinkhole insurance

There are two types of sinkhole insurance: Sinkhole Loss Coverage, and Catastrophic Ground Collapse.

The first, Sinkhole Loss Coverage, is a sinkhole endorsement with coverage limited to previous mining operations. Some insurers exclude naturally occurring sinkholes from coverage, while others offer it and focus on coverage for sinkholes caused by natural phenomena. Getting the coverage will likely require a geological survey of the property to make sure there isn’t an obvious risk of a sinkhole collapse.

Catastrophic Ground Collapse insurance is different. Only Florida and Tennessee require it from homeowners. Most sinkholes are excluded from this coverage because they must meet these four criteria:

  • Abrupt collapse of the ground cover must occur.
  • Depression in the ground must be clearly visible to the naked eye.
  • Structural damage must be done to the building covered, including the foundation.
  • Insured structure must be condemned and ordered vacated by the government agency authorized to do so.

For this coverage to help, a home must almost fall into a sinkhole. Even if it causes cracks in the foundation, unless the home is condemned, then catastrophic ground collapse coverage won’t help.

Florida and Tennessee insurers are required to offer optional sinkhole insurance, providing comprehensive protection against sinkhole damage.

If you get sinkhole insurance, make sure it’s enough coverage to completely rebuild your home if it’s destroyed. It should also cover preventative measures such as structural bracing so that an impending sinkhole doesn’t severely damage your property.

How much does sinkhole insurance cost?

If you live in Florida or another area prone to sinkholes, then sinkhole insurance may be worthwhile — though expensive.

Sinkholes are impossible to predict, though some areas are more likely to have them than others. Coverage can be expensive in Florida and Pennsylvania — the top two states for sinkholes — while insurance in less active areas can be cheaper. Some Florida counties with a history of sinkholes have annual premiums of more than $2,100 for just sinkhole coverage. That’s more than the average homeowners insurance policy in the state of $1,991.

The Bottom Line

How much risk you’re willing to take will be a big factor in the decision of whether buy sinkhole insurance. Feel lucky and live in an area without a history of sinkholes? Then forgo the extra insurance.

Unsure or think you live in an area prone to sinkholes? Check the USGS map listed above and ask your insurance agent for guidance. And if you’re going to watch sinkhole videos, try not to get too worried.

Call one our insurance advisors today at (844) 824-2887 to see if your insurer will add on sinkhole coverage to your homeowners insurance policy.

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