With the recent media attention sinkholes have received over the past few months here in Florida and because of my experience with Florida Home Insurance, I thought I'd take a few moments to chat with you about how you might be affected.
First, let me ease any fear you, as a homeowner here in Florida, might have. Most consumers do not know that there are two types of sinkhole coverage. If you have a Homeowners Insurance policy (HO3), you are covered for a catastrophic sinkhole, such as the one seen on TV, in which the house was condemned. Every HO3 policy written by Florida Insurance Companies must have this coverage. The keyword is condemned. In order for this coverage to kick in, the home must be classified as such. The technical insurance term for this coverage is 'Catastrophic Ground Cover Collapse.'
The second type of sinkhole coverage Florida Home Insurance Companies may have discussed with you is 'Optional Sinkhole Coverage.' This is where the confusion often starts because of how the coverage is worded. This coverage is not required and can usually be purchased at an extra cost. This coverage pays for structural damage caused by damage in which the home is not condemned, such as cracking in the homes foundation. When you hear on the news that Florida Insurance Companies are no longer providing sinkhole coverage, this is the optional coverage they are talking about.
Over the past couple of years, Florida Homeowners may have received a notice from their Florida Insurance Company explaining that sinkhole coverage was being removed from their homeowners insurance policy. This has prompted many consumers to contact their agent with plenty of questions.
You may have been told that there are some Florida Insurance companies who will still offer a Florida Homeowner the Optional Sinkhole Coverage. While this is true, I want to make it clear that there are some requirements that may need to be met if you want this extra coverage. First, the insurance companies offering this coverage will most likely want you to obtain a Sinkhole Screening Property Inspection from SDII Global Corporation. The inspection is conducted by a trained SDII Inspector who gathers data and photos inside the dwelling, outside the dwelling, around the property, and in the surrounding neighborhood.
The inspection is not the problem. The fact that you, as the homeowner wanting the extra coverage, will have to pay approximately $ 140 from your pocket to have the inspection performed may be the problem. Secondly, it has been my experience color : as a Florida Insurance Company About enterprise | That most homes will not qualify for the extra coverage after the inspection is completed. The inspection company sends the inspection report to the insurance carrier for review. After review, many companies decline to add the coverage at the homeowners request. Once the underwriter for the insurance company reviews the report and notices any signs of cracking in the driveway or on the exterior wall, or nail pops in any of the rooms of the home, the underwriter will decline to offer this coverage. You may have wasted your time and money in the long run. These are all tips to consider when thinking about signing up for Optional Sinkhole Coverage.