What is a sinkhole?

• A sinkhole is "a hole or depression in the ground that results from surface material moving into subsurface pathways caused by the weathering process," according to the Pennsylvania Department of Environmental Protection.

Sinkhole Characteristics

• Some sinkholes may evolve gradually as a bowl-like depression. Other sinkholes may form quickly into a deep, water-filled crater. The size of the cavity's subsurface and the thickness of the organic or sediment matter determines the sinkholes' shape.

Collapse Sinkholes

• Collapse sinkholes occur immediately, forming deep holes in the ground. Water fluctuations trigger collapse sinkholes. When the water constantly changes, it puts pressure on the cavity's roof, which eventually weakens.

Subsidence Sinkholes

• Subsidence sinkholes form when the sediment matter thins. Sand granules replace the limestone, appearing as concave depressions. As the sand granules fill the hole, it begins to restrict the water flow from the bottom, holding water. This eventually creates a lake.

Solution Sinkholes

• When the overburden or sediment matter depletes, the limestone erodes from the environment. Over time, a solution sinkhole gradually forms and the rock continues to erode.

Land Surface

• Areas containing carbonate rock, limestone, rock or salt beds under the land surface are more likely to have a sinkhole. A sinkhole can occur without notice; the land is intact before it occurs.

As for your property, as long as the damage to your property is caused by sinkhole activity and your policy is properly endorsed with the sinkhole endorsement, you would be covered for sinkhole damage.  However, a sinkhole claim is the most difficult claim to handle for a policyholder, like yourself.  The sinkhole investigations are very technical; requiring insurance companies to bring in a number of experts to analyze the cause and repair options.  The investigation process is lengthily and there are many insurance coverage issues that have to be dealt with.  You are faced with the decision of determining your options for the sinkhole repair under your policy and obtain permanent fix.  If not handled properly, it can affect the value of and further imperil your property, your business and you.

In 2011, the Florida Legislature passed a new insurance bill that redefined sinkhole insurance coverage.

Catastrophic Ground Cover Collapse
All authorized carriers must provide this coverage defined as follows:
“Catastrophic ground cover collapse” means geological activity that result in all the following:

• The abrupt collapse of the ground cover;
• A depression in the ground cover clearly visible to the naked eye;
• Structural damage to the covered building, including the foundation; and
• The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

Sinkhole Loss Coverage
In addition, the insurer shall make available, for an appropriate additional premium, coverage for sinkhole losses on any structure.
“Sinkhole loss” means structural damage to the covered building, including the foundation, caused by sinkhole activity.
“Structural damage” means a covered building, regardless of the date of its construction, has experienced the following:

• Interior floor displacement or deflection in excess of acceptable variances as defined in ACI 117-90 or the Florida Building Code, which results in settlement-related damage to the interior such that the interior building structure or members become unfit for service or represents a safety hazard as defined within the Florida Building Code;
• Foundation displacement or deflection in excess of acceptable variances as defined in ACI 318-95 or the Florida Building Code, which results in settlement-related damage to the primary structural members or primary structural systems that prevents those members or systems from supporting the loads and forces they were designed to support to the extent that stresses in those primary structural members or primary structural systems exceeds one and one-third the nominal strength allowed under the Florida Building Code for new buildings of similar structure, purpose, or location;
• Damage that results in listing, leaning, or buckling of the exterior load-bearing walls or other vertical primary structural members to such an extent that a plumb line passing through the center of gravity does not fall inside the middle one-third of the base as defined within the Florida Building Code;
• Damage that results in the building, or any portion of the building containing primary structural members or primary structural systems, being significantly likely to imminently collapse because of the movement or instability of the ground within the influence zone of the supporting ground within the sheer plane necessary for the purpose of supporting such building as defined within the Florida Building Code; or
• Damage occurring on or after October 15, 2005, that qualifies as “substantial structural damage” as defined in the Florida Building Code.