This is a common question we receive from homeowners and clients and involves many different angles and sub-parts. One more specific question is if I filed a claim and they denied sinkhole at my home should I continue to carry sinkhole coverage? Reviewed in a vacuum I suppose that if you have had your home investigated and there truly is no sinkhole activity affecting the property then theoretically why pay for the coverage? The problem and concern is two-fold. First, always get a second opinion if it is the insurance companies expert saying that sinkhole activity does not exist, they can be wrong or biased. Second, just because sinkhole activity does not exist now does not mean that it will not occur in the future. Sinkhole activity can arrive abruptly and without notice sometimes so to be safe, it is always a good plan to carry the coverage if it is economically feasible of course.
For clients that have confirmed sinkhole activity and are having their home repaired the analysis changes a bit. Remember, sinkhole repairs are not always effective and are certainly not guaranteed so even if you have had the home repaired you still want to be protected from future problems and/or failed repair jobs. Many carriers will not want to renew your policy once the repairs are complete and they feel they are “off the hook” and new carriers will not want to insure a home for sinkhole when a sinkhole has already been discovered, even if repaired. Ultimately, this makes it very difficult for homeowners who have had confirmed sinkhole conditions to find sinkhole coverage again after a claim. This typically should not affect other coverages completely unrelated to sinkhole damage such as fire or hurricane coverage.
By law, a carrier should not drop your coverage during the pendency of a sinkhole claim just because you filed a claim. This is of course relatively easy for carriers to circumvent as they will simply wait for the renewal to come around and make up an excuse on why they won’t renew you again. Reality is once you file a sinkhole claim it is more often than not unlikely that you will ever be able to obtain sinkhole coverage from another carrier down the road. This is why we stress the fact that once you file a claim, it is typically your “one shot” at making sure it is done right and nothing is left on the table.