Florida experiences more sinkhole activity than any other state. Sinkholes form when rainwater dissolves limestone and other types of rock underground. Florida’s bedrock consists mainly of limestone, which is why sinkholes are such a risk to the state.

Current Florida statue requires all personal and commercial property insurance policies to include catastrophic ground cover collapse. But that may not cover you should a sinkhole damage your property. Both types of coverage are defined below, with a comparison to help you determine your coverage needs based on your risk appetite.

Catastrophic gound cover collapse definition
Catastrophic ground cover collapse means the geological activity that results in all of the following:

1. The abrupt collapse of the ground cover;
2. A depression in the ground cover clearly visible to the naked eye;
3. Structural damage to the building, including the foundation; and
4. The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

Sinkhole definition
Sinkhole means a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole may form by collapse into subterranean voids created by the dissolution of limestone or dolostone, or by subsidence as these strata are dissolved.

Sinkhole loss means the structural damage to the building, including the foundation, caused by the sinkhole activity.

Sinkhole activity means settlement or systematic weakening of the earth supporting such property only when such settlement or systematic weakening results from movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on limestone or similar rock formation.

• Sinkhole coverage provides more comprehensive coverage than Catastrophic Ground Cover Collapse. If the property suffers foundation cracks or other damage caused by sinkhole activity, meaning it is still habitable but just needs repairs, it will be covered with sinkhole coverage.
• Catastrophic ground cover collapse coverage is very restrictive and must meet all four criteria listed above to qualify for a loss. 
• Sinkhole coverage does not require the building to be condemned and ordered to be vacated for coverage to trigger.
• Both catastrophic ground cover collapse and sinkhole coverage are intended to ONLY cover the roofed and walled structures. They are not intended to cover cracked driveways, sidewalks, swimming pools or patio decks. They do not cover sinkhole activity on open land, parking lots, streets or roads or similar property that may serve a community.

While you will save money on your premium without sinkhole coverage, you risk having to pay out of pocket for damages should sinkhole damage occur to your property. With the frequency of sinkhole activity in Florida, you should ensure your investment is protected with the most comprehensive coverage available.

For more information on sinkhole and catastrophic ground coverage, or Community Assocation Management other insurance questions, contact: 

Matt Mercier, AAI, CIRMS, CMCA, LCAM
Director of Community Association Management
941.586.0702
MMercier@cbiz.com
www.cbiz.com/insurance