Sinkhole Coverage vs. Catastrophic Ground Collapse

The two terms sound interchangeable, but there are big differences when examining sinkhole coverage vs. catastrophic ground collapse.

As with most insurance policy complaints, rampant fraud and abuse of the system have led insurance companies to recognize a distinction between sinkhole insurance and catastrophic ground cover collapse coverage.

sign reading "Danger Sinkhole"

Let’s take a look at the major differences when comparing sinkhole coverage vs. catastrophic ground collapse.

Catastrophic Ground Cover Collapse

Catastrophic ground cover collapse coverage is included under your existing home insurance policy.

However, your claim must meet four requirements before your insurance company will reimburse you for the loss:

  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 insured 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.

Again, all four of these conditions must be met for it to be considered catastrophic ground collapse. Incidents that meet only some of these conditions would require a sinkhole insurance policy.

Sinkhole Insurance

A sinkhole insurance policy covers structural damage to the insured building, including the foundation, caused by sinkhole activity. A “sinkhole” is defined as “settlement or systematic weakening of the earth” resulting from “contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on a limestone or similar rock formation.”

Because sinkhole policies cover a greater number of claims, they are much more difficult to find. In fact, Florida sees so much sinkhole activity that many insurers simply do not issue this type of policy. The ones that do offer sinkhole insurance riders often apply deductibles of 10% (or more) of the value the insured home.

This increased deductible does not apply to catastrophic ground cover collapse coverage.

woman thinking on park bench

Do I Need Both?

When examining sinkhole coverage vs. catastrophic ground collapse, the differences between them are clear.

Sinkhole insurance is much broader than catastrophic ground cover collapse, making it much easier for crooks to abuse (causing premiums to sky rocket). Catastrophic ground cover collapse coverage doesn’t cover every sinkhole, but it does ensure that, in most cases where your home is directly over a major sinkhole, you are covered without a sky-high deductible.

As always, your best bet is to thoroughly read over your homeowners insurance policy so that you are clear on what situations are covered as well as any gaps in coverage.

If the insurance jargon is confusing, don’t fret! Contact your insurance agent or carrier to verify what types of sinkhole loss are covered under your policy.



The threat of sinkholes can be frightening. The good news is that they are relatively rare and most sinkholes occur in Hernando, Pasco, Hillsborough, and Pinellas counties. Here in Central Florida, alligators and hurricanes are a much bigger threat to personal property.


By Jason Leveine