Most standard homeowners insurance policies exclude coverage for sinkhole formation. Homeowners policies are generally valued based on the cost to rebuild the physical structure of your home. This means that a sudden movement of that land, including sinkholes, won’t normally be covered by a regular homeowners policy.

Can you insure against sinkholes?

What about insurance? Sinkholes aren’t usually covered on a home insurance policy unless they damage the fabric of the building.

What insurance companies cover sinkholes?

Many major insurance companies, such as Nationwide, Travelers and USAA, offer sinkhole endorsements in high-risk areas. However, coverage may be limited only to events caused by previous mining operations. Nationwide and Travelers, for example, exclude naturally occurring sinkholes from coverage.

How does sinkhole insurance work?

Sinkhole insurance will provide compensation for damages to your business or home, outlying property and personal belongings kept inside the building if they are damaged as the result of a sinkhole on your property. Even a small shift in the earth beneath the foundation of a building can cause severe structural damage.

How much does it cost to fix a sinkhole?

A small sinkhole with minimal damage to the structure may cost anywhere from $10,000 to $15,000. However, sinkholes that cause extensive damage and need a significant amount of work to repair or revive the structure, may be much pricier, costing anywhere from $20,000 to $100,000, or more.

What are the odds of a sinkhole?

In the United States, sinkholes are especially common in Texas, Alabama, Missouri, Kentucky, Tennessee, Pennsylvania and Florida, according to the U.S. Geological Survey. The actuarial risk of a catastrophic sinkhole happening is low—researchers put it at a one-in-100 chance of occurring in any given year.

Can a homeowners insurance policy cover a sinkhole?

The short answer is yes, homeowners insurance does cover for “catastrophic ground collapse” but not minor sinkhole issues. Read on to find out more what it means. Below is a handout from a local realtor in Florida explaining the difference between “Catastrophic Ground Collapse Coverage” and “Sinkhole Loss Coverage”.

How does an insurance company determine the cause of a sinkhole?

The insurance company will perform geological testing by sending a geologist in your area to establish the cause of the damage. If the testing confirms that the damage was caused by a sinkhole, your insurance company should pay for the testing and repairs. What if the insurance company denied my claim?

How much do you have to pay for sinkhole inspection?

Also, the homeowner will be required to pay around $150 upfront for the inspection. Should you get sinkhole coverage, you will need to pay about $100 per year aside from the homeowner’s insurance policy. What is catastrophic ground collapse coverage?

What happens if you file multiple home insurance claims?

Filing multiple claims may make your insurer think there are too many risks in your home, and this could result in a higher premium or cancellation. If you bundle your homeowners insurance with your car insurance, this may affect your auto policy, too.