I called my insurance company about a major problem that developed when we were putting an addition on the home. It turns out I have a problem with too much organic materials (debris) in my soil. After several weeks of waiting, I received a denial letter, saying that I had no coverage, due to “settlement damage.” Later, I heard my neighbor say he has a confirmed sinkhole, and that maybe sinkhole activity had something to do with it. I am a bit lost!

The problem you are facing is common, in that many insurance companies will seek to limit their investigation to the nature of the claim “submitted” to them by the insured.

What had probably occurred was that the claim adjuster heard someone say that you were filing a claim, due to settlement damage, in part because of the debris found in your soil. But, understand this: claims do not come in any particular shapes, sizes, or flavors. Your claim was for the damage to the home, and you were under no requirement to submit a particular kind of claim. Instead, you are supposed to be able to submit your claim for the damage that is present, and the insurance company must either pay it, or tell you why they won’t. If the damage is consistent with sinkhole or sinkhole activity, they are required to do an investigation, regardless of how you submitted it or what you thought the damage was.

If you ever have a claim denied for other reasons, when the damage is settlement related, you should expect your insurance company to conduct a sinkhole investigation. If they do not, you are able to force them to do that, so that you can be assured that the damage is not related to sinkhole in any way.

Read our tips on filing a sinkhole claim.

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