How Do Sinkhole Claims Differ From Other Property Damage Claims?

Sinkhole claims in Orlando, FL fall under some specific state laws and have unique insurance requirements. If you’re dealing with a sinkhole, call an experienced sinkhole claims attorney to make sure your claim has the best chance of success.

How Orlando, FL Sinkhole Claims Differ From Standard Property Damage Claims

Coverage Availability and Scope

Most standard policies here in Florida will cover things like fire, theft, water damage from burst pipes, and often also windstorms. Usually you get all this on your base policy without any special endorsement, though flood damage usually requires separate flood insurance.

Sinkhole coverage is not automatic. Florida law requires that insurers offer it as an optional endorsement, but it is not mandatory. What is mandatory is something called “Catastrophic Ground Cover Collapse (CGCC)” coverage. At first glance, you might think that describes a sinkhole, but actually CGCC is a narrower coverage, and it only complies if four very specific conditions are all met:

1. There’s been an abrupt collapse of the ground cover
2. There’s a depression visible to the naked eye
3. There’s been structural damage to the building, including the foundation
4. The structure has been condemned and ordered vacated

True sinkhole coverage protects against broader “sinkhole loss,” and true coverage applies even if the home remains habitable.

Claims Investigation

With a standard property damage claim, there’s usually an inspection by an adjuster, who will look at the visible damage, estimate what it will cost to repair, and then make a determination about whether the cause of the damage is a covered peril. With sinkholes, things get a lot more complicated and even adversarial. Many homeowners have to get geological testing to confirm that sinkhole activity is the cause of the damage rather than poor construction or soil settlement, and it’s much more common for insurers to deny claims.

Under Florida law, there’s a specific type of structural damage that applies specifically to sinkholes. To be considered sinkhole damage, it must impact the building’s structural integrity or pose an imminent risk of collapse. Coverage will not apply just to cosmetic issues like cracks. Because this can be such a contentious question, Florida homeowners are allowed to request help from a neutral evaluation program through the Florida Department of Financial Services if they get denied.

Deductibles and Costs

With standard property claims, deductibles are a flat amount or a percentage, and the payouts usually cover repairs up to the limits of the policy, after the deductible. But with sinkhole claims, the deductibles are often much higher. It’s not uncommon for them to be 10% of the coverage amount for the dwelling. The average claim payout is also frequently very high, which is one of the reasons this coverage has to come with a special endorsement and has high premiums.

Talk with a Sinkhole Claims Attorney

Sinkhole claims can be very difficult to appeal, and even a small mistake in the filing can set things back or even leave you with a denied claim. Call us today at HD Law Partners in Orlando, Tampa, Sarasota, or Fort Myers for experienced help with sinkhole claims.

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