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QUESTION: Does flood insurance cover sink holes caused by underground water?


ANSWER: Sinkholes are geological movements that can disturb the foundations of insured homes. In those states where the local geology makes sinkholes more probable, they can be included in your homeowners insurance policies. Sometimes, this inclusion is automatic. Read your terms to see whether this is part of the cover. If not, you must negotiate for the cover to be added to the standard policy as a special endorsement. However, this approach is changing where the number of damaged properties is rising fast. So, for example, private insurers in Florida are now beginning to refuse cover and the lawmakers may be about to make it more difficult to claim. This is going to leave the states where sinkholes are a real problem with the decision whether they should offer a state insurance plan. This would match the federal provision for flood insurance in that the taxpayers would pick up the bill for any losses where the payment of claims exceeds the amount of premiums collected.

To answer your question directly, flood insurance under both the current federal and private cover does not cover any damage to your home that might be caused by sinkholes. To give you the right to claim, the cause must be proximate. A flood is water damage to your property, not a hole opening underneath the property. If the hole is caused by the level of groundwater dropping, this is one step removed from the cause of the damage. The most proximate causes are the suBsequent drying of the ground and the collapse of the ground where the clay base is at its weakest. So your only claim is under your homeowners or commercial property policy if you have the appropriate terms in place.


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