A sinkhole is a sudden depression in the earth, formed due to decaying or erosion of underground minerals or rocks (such as limestone). Some Sinkholes can be large and can cause the whole house or building to sink deep into the ground. The losses and damages resulting from such an event can be devastating for the homeowner.
The kinds of damage that a homeowner can face due to a sinkhole formation are as follows: Depressions in the yard, Windows and Doors don't shut properly, Cracks on the walls and ground in the home, Uneven pavements and floors, and Sinking of fence posts.
A sinkhole insurance policy covers damage to property caused by a sinkhole collapse. Many homeowners tend to overlook sinkhole insurance, though it is quite important that you have this coverage. Not many insurance companies include sinkhole insurance in their standard home insurance policy.
What to look for in a sinkhole insurance policy? When you search for sinkhole insurance for you house, you should be careful enough to read what coverages are provided in the sinkhole insurance policy. Some sinkhole insurance polices compensate only for the damages to the house caused due to a sinkhole collapse, whereas some others also pay for the extensive underground repair work that needs to be undertaken after a sinkhole collapse.
Look for a sinkhole insurance policy that will pay for damages to the house and also pay for repair of the sinkhole. The cost of underground repairs after a sinkhole collapse can be around $100,000. Hence, when choosing a sinkhole insurance policy, always consider the initial amount that the insurance company will pay you in an event of loss caused due to a sinkhole collapse.
You should also be aware of the methods followed by insurance company to determine the extent of damage after such an incident. Some insurance companies send a geologist or an engineer to study the extent of the damage and to verify you claim. You need to ensure that the amount the insurance company pays you in the event of damage is sufficient and meets your requirement.
If your house is located in an area, which has layers of limestone below the land surface, chances are that you will face problems associated with sinkholes almost every year. In such a case, it is very essential for you to have a sinkhole insurance policy.