How Catastrophic Ground Cover Collapse Insurance Works

In most of the United States, insurance policies don’t cover sinkholes, landslides, or other issues linked to collapsed ground. In Florida, however, these incidents could fall under your policy’s catastrophic ground cover collapse insurance.

Many Florida homeowners don’t understand how catastrophic ground cover collapse insurance works or what it covers. We’re here to help.

What is Catastrophic Ground Cover Collapse Coverage?

Catastrophic ground cover collapse coverage is a type of insurance coverage that compensates homeowners for damage linked to certain ground movements – including landslides, sinkholes, and similar events.

Catastrophic ground cover collapse works similarly to other insurance policies. If your property is damaged by a covered event, then you receive compensation to restore your property to pre-loss condition:

• All homeowners insurance companies in Florida must provide catastrophic ground cover collapse insurance.
• Catastrophic ground cover collapse insurance covers damage caused by sudden movements in the earth – like certain types of sinkholes and landslides.
• If your home’s foundation is damaged by a ground cover collapse, then your insurer could compensate you for the cost of repairing or restoring your property to pre-loss condition.
• Your damage must meet certain requirements to qualify for coverage under Florida’s catastrophic ground cover collapse laws.

If a sinkhole suddenly forms under your home, for example, then you could make a claim through your policy’s catastrophic ground cover collapse insurance.

How Catastrophic Ground Cover Collapse Coverage Works

Catastrophic ground cover collapse coverage doesn’t apply to all sinkholes, ground movements, or other events.

Instead, your incident must meet four specific requirements, including:

Requirement #1: The ground cover abruptly collapsed.
Requirement #2: You can see the collapse of the ground cover (i.e. the hole) with the naked eye.
Requirement #3: The ground cover collapse caused damage to the foundation of a covered structure (i.e. the foundation of your home).
Requirement #4: The damage was sufficient enough for a government agency to condemn the home and declare it unsafe for habitation.

If your ground cover collapse incident meets all four of these requirements, then your Florida homeowners insurance company should cover the damage.

Sinkhole Insurance vs. Catastrophic Ground Cover Collapse Insurance

Sinkhole insurance and catastrophic ground cover collapse insurance are two different types of coverage:

• Sinkhole coverage is an optional insurance coverage available in certain states from certain insurers. It covers damage to your home caused by sinkholes (i.e. a sudden collapse in the ground causing damage to your home or property).
• Catastrophic ground cover collapse insurance is a type of insurance coverage required by the state of Florida. All homeowners insurance companies in Florida must provide this coverage. It covers damages that meet all four requirements listed above.
• Sinkhole coverage covers a wider range of situations than catastrophic ground cover collapse insurance. It can cover a small hole on your property that only caused minor damage, for example.
• In order to make a claim through catastrophic ground cover collapse insurance, the damage must be severe to the point where your home is uninhabitable. There’s no such requirement for sinkhole claims.

Why Do Catastrophic Ground Collapses Occur?

Catastrophic ground collapses and sinkholes can occur for a variety of reasons – including natural reasons like localized flooding and manmade reasons like mining or agricultural activity.

According to the state of Pennsylvania, some of the causes of catastrophic ground collapses and sinkholes include:

Decline of water levels caused by droughts or groundwater pumping (say, through mining activity or wells)
Disturbance of the soil caused by excavation or drilling
Leaking water, sewer pipes, water injections, and other sudden influxes of water
Water impoundments, including basins, ponds, dams, or stormwater drains collecting water in a specific area
Heavy loads on the surface, including structures and equipment

Where Can Catastrophic Ground Collapses Occur?

Catastrophic ground collapses and sinkholes can occur anywhere in the United States.

They’re more common around water and low-lying areas. However, they also frequently occur in areas with large amounts of limestone bedrock or certain other types of rock.

According to the United States Geological Survey, homeowners in the following states have the highest risk of catastrophic ground collapses and sinkholes:

• Florida
• Texas
• Alabama
• Missouri
• Kentucky
• Tennessee
• Pennsylvania

However, homeowners across the country are susceptible to sinkholes because of evaporite rock. Evaporite bedrock lies under approximately 35% of the United States (although some of it is at great depths). When water encounters this evaporite rock, it increases the risk of sinkholes and catastrophic ground collapses.

How Insurance Covers Different Types of Ground Collapses

It’s easy to get confused by how insurance covers ground collapses.

Different types of insurance cover different types of ground collapses:

• Earthquakes: Typically, you buy a separate earthquake policy to cover earthquake-related property damage.
• Mudflows: A standard homeowners insurance policy does not cover mudflows. Instead, mudflows are covered by flood insurance. You buy flood insurance through FEMA’s National Flood Insurance Program. If you don’t have flood insurance, then your insurer could exclude damage related to mudflows.
• Landslides: Landslides aren’t treated the same as mudflows. Landslides are considered earth movements, while mudflows are considered flood damage. Most homeowners insurance policies exclude landslide coverage.
• Sinkholes: Sinkholes are covered under sinkhole policies. Some sinkholes also fall under Florida’s catastrophic ground collapse coverage, assuming they meet the four requirements above.
• Other Catastrophic Earth Movements: Insurers could categorize earth movements as flood damage or earth movement damage. If your situation meets the four requirements listed above, then it could be covered under Florida’s catastrophic ground collapse coverage.

Ask your insurer about “Difference in Conditions” coverage. As the III explains, Difference in Conditions coverage could cover landslides, mudflows, earthquakes, and floods under one policy.

How Public Adjusters Help with Catastrophic Ground Collapse Claims

Confused about earth movement coverage? Aren’t sure about the next steps to take? Contact ClaimsMate today for expert claims assistance.

ClaimsMate’s public adjusters work on your behalf to obtain an optimal insurance claim settlement.

Our adjusters have firsthand experience with earth movement claims, sinkholes, and more – including a proven track record of winning higher payouts for clients.

Schedule a no-cost consultation with a public adjuster today to help resolve your catastrophic ground collapse claim.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.