Does Homeowners Insurance Cover Sinkholes?

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Sinkhole (Photo: @penninck via Twenty20)
Liliana Pina · Dec 18, 2020
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    Though sinkholes are extremely rare, they can have life-changing implications if they cause severe damage to your home and other personal belongings. But are they covered by standard home insurance? Here’s what you need to know.

    What is a sinkhole?

    Sinkholes form when groundwater weakens the earth’s surface and causes the ground to collapse in on itself, forming a hole or dip in the land. They can range from small to very large, and often cause immense damage to the land and its surrounding areas. Fortunately, sinkholes are a rare natural occurrence when compared to other common hazards that can impact your home.

    Does standard homeowners insurance provide coverage for sinkholes?

    Insurance companies categorize sinkholes as earth or ground movements, and like other events with this distinction, such as earthquakes and landslides, they are not a named peril covered by standard homeowners insurance policies.
    However, most insurance plans will provide coverage in the event sinkholes cause any structural damages to your dwelling (but not to the land around it). If you would like to include sinkhole coverage in your insurance plan, you will need to do it via a rider or endorsement.
    The language and jargon in insurance contracts can be tricky to understand, so be sure you thoroughly read your policy and reach out to your provider with any questions or concerns you have about your coverage.

    How to find a policy that protects you from damages caused by sinkholes

    In some cases, you can purchase sinkhole coverage as an add-on or endorsement from your current insurance provider for an additional fee. If they do not provide this coverage add-on, your only remaining option is to take out a plan with a different insurance company.

    Should you purchase sinkhole coverage?

    Though rare in the United States, sinkholes can suddenly occur at any time and wreak havoc to your home and life. According to the United States Geological Survey, the states with the highest reports of sinkhole damage include Alabama, Florida, Texas, and Pennsylvania.
    If you live in an area or state that is at high risk for sinkholes, and can afford a slightly higher premium and monthly insurance bill, consider taking out this specialty policy to help ease the financial burden in the event of an emergency.
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