On the evening of March 1, 2013, a sinkhole opened up under the home of Jeff Bush in Seffner, Florida. It opened in a matter of seconds resulting in the floor underneath Bush’s bedroom giving way. Attempts to rescue Bush failed and he was presumed dead in the days that followed. The home was demolished a few days later.
Sinkholes in Florida, Louisiana, and other states with large amounts of subsurface limestone or sandstone are a common occurrence. What made the Seffner, Florida sinkhole unusual was that it claimed Jeff Bush’s life. One of the largest sinkholes to occur in Texas was the sinkhole in Daisetta, Texas, a town 60 miles northeast of Houston. Within a 24 hour period starting on May 8, 2008 the hole expanded to a width of 900 feet and a depth of 260 feet.
Nearer to home, a Coppell, Texas family experienced a sinkhole in their backyard in early February of 2011. A sinkhole consumed a retaining wall and threatened to also take the pool.
The causes of sinkholes include:
- Water main leaks
- Mine collapse or cave in
- Collapse where drilling chemicals are injected into the earth
- Collapse of a rock area above a cavern or salt dome
From an insurance perspective, this was an issue that popped up on my radar in January. My friend who is a Dallas area mortgage professional called me. One of her clients was securing a loan to build a custom home on Cedar Creek Lake southeast of Dallas. An area near the custom home development had experienced sinkholes. Her question was:
Could I quote a home insurance policy that would provide coverage for sinkholes?
The loan underwriter was requiring the home insurance provide coverage for sinkhole loss to allow the loan to go through. After discussing this need with every underwriter I work with, along with friends who are with competitor companies, I found out the following:
- I’ve not found any home insurance carrier that will include coverage for sinkholes.
- Sinkholes tend to fall into the area of earth movement whether by erosion or earthquake.
- All Texas policies exclude coverage for earth movement, although earthquake coverage can be endorsed or added. (see http://188.8.131.52/~wiseinsu/earthquakes-your-home-policy/)
- There are States such as Louisiana and Florida where sinkhole coverage is available as an option to the home policy.
- If that option is not added, damage from a sinkhole is not covered.
For Texans, damage that is caused to our home or detached structures, such as a retaining wall, swimming pool, etc. is not covered. For the family in Coppell, their loss was not covered by their carrier and all repairs to fill in the sinkhole, shore up the pool, and replace the retaining wall would come out of their pocket. Most of us will never have to worry about this, but there are those unusual occasions where having that type of coverage available would be helpful.
What do you think? Should Texas insurance companies provide optional or built in coverage for sinkhole loss? Would you pay for it if they did? Let us know your thoughts and questions in the comments section of our blog or on our Facebook page.