Sinkholes: what insurance does and doesn't cover - FOX 13 News

Sinkholes: what insurance does and doesn't cover

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TAMPA (FOX 13) -

Sinkhole insurance is optional in Florida, and many people have ditched it to save money.

It sounds alarming, but there is a safety net, albeit a schizophrenic-seeming one.

If you opted out of sinkhole coverage, claims for things like cracks in the driveway or fractures in the walls will be denied. They're considered minor.

However, every homeowner's policy covers something called "catastrophic ground cover collapse." That's when a sinkhole opens suddenly and severely damages your home.

The key is, a local authority must condemn the property. Claims are only paid when a home is unlivable.

Every policyholder -- even those who've said no to sinkhole coverage -- have that assurance.

Why is the other sinkhole coverage optional?

Insurance companies said many smaller, not-so-newsworthy sinkhole claims were draining their coffers.

Tallahasee bought that argument, with this twisted logic: if you're going to have a sinkhole and you want insurance to pay, you want a whopper.

So, should insurance companies be doing more to prevent sinkholes from becoming catastrophic?

Consider this: when we recently asked about how much insurance companies would pay to trim trees that lean precariously over our homes (which is zero, by the way) the Insurance Information Institute said, point blank, a homeowner's insurance policy covers damage -- not threat of damage.

So if a tree leans? It's not covered.

If a tree falls? It's covered.

And it's the same with sinkholes. Does your house have cracks? The claim will be denied.

Was your house swallowed? Claim approved.

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