Does homeowner’s insurance cover sinkholes?
Many homeowners look to their home insurance to fix every problem that occurs. Unfortunately, this is sometimes not the case and depends on your own insurance policy and your level of coverage. For example, if you elected only for catastrophic sinkhole coverage, your insurance will only be there for you if the damage is so bad, your home is condemned. That being said, what should you expect from your insurance? Does homeowner’s insurance cover sinkholes?
What is standard sinkhole coverage?
It is highly recommended that you spring for standard sinkhole coverage; though it’s pricier, and you may not think you’ll ever need sinkhole insurance, sinkholes are not easy to predict and even more difficult to pay for repairs.
If you did opt for standard sinkhole coverage, your insurance policy will cover the cost to stabilize the land and the foundation of your home. On top of that, they must also pay you the cost of any cosmetic damages resulting from the sinkhole.
The grouting loophole
Does homeowner’s insurance cover sinkholes? Well, yes, but always be aware that insurance companies are in the business to make money, and will take advantage of you if you allow them to.
One common loophole is the manner in which your land and your home are repaired. Insurance companies will usually pay to grout the soil, which is essentially one of the only ways to stabilize it. To grout the soil, a cement-based material is injected around the perimeter of the home and to an appropriate depth beneath it.
While this may sound great, this is not an appropriate repair, and your home will likely fail in the future. This is because while some areas have been stabilized, the upper 10 to 15 feet of your soil are likely unaffected by grout, leaving your home susceptible to another sinkhole. To fix this problem, the appropriate repair is underpinning, which connects your home to the ground with poles. While the right choice, this is expensive, so your insurance company is likely to avoid this route if possible.
The cosmetic damage loophole
Lastly, the insurance company must pay for the cosmetic damages to the home. This usually includes the cracking to the interior and exterior, as well as to the floors and the foundation itself. To be exact, your insurance company is obligated to pay what is required to bring your home back to its pre-sinkhole state.
It is important that you do not receive this check until the repairs are completed because any of these cracks are not visible until the repairs are completed. If you receive payment before anything is fixed, it may feel nice to get some money to help out with your sinkhole repairs, but it is impossible for your insurance company to accurately assess how expensive repairs will be until all the damage is made clear.