What's happening to sinkhole coverage?
There's something particularly disconcerting about getting up in the morning to find a hole has suddenly appeared in your yard. There's no convenient warning. If we're talking about landslides, these usually follow heavy rains and you can see the possibility of them coming. But we usually trust the ground under our feet. We assume the foundations for our homes will be strong and firm unless an earthquake or something catastrophic comes along. But geology is what it is and, if you live in the wrong area, what looks a solid support one minute can disappear the next. Worse, without any warning. You can literally be sitting on your couch watching TV and then find your home slowly subsiding around you.
If we go back twenty or more years, this was less of a problem because builders had plenty of land to choose from. With geologists to survey the land, new construction could be placed in the safest areas. But as the population has risen and cities have taken up the best land, you now find construction spreading over the flood plains and on to land prone to sinkholes. The result is the rapid withdrawal of insurance coverage from many new housing developments as the extent of the problems become apparent.
Some of the worst problems have been experienced in Florida where one stretch of land passing through Pasco and Hernando counties is known as Sinkhole Alley. In the five years from 2006 to 2010, there were claims for $1.4 billion and there's no prospect the number of claims will be falling. Indeed, given the rush to develop new estates to cope with the inflow of new residents during the boom years, there's every chance the number of claims will rise.
Fortunately the state government is acting. The Republican majority has proposed a bill to remove the mandate for the private insurers to offer cover. Everyone with a grain of common sense will understand what will happen should this bill be voted into law. At present there's a state fund called the Citizens Insurance Property Corp. Should the mandate be removed, the Citizens will become the only insurer overnight. The Republicans argue the removal of the mandate is the only way to prevent all the private insurers ceasing their trade in Florida. Apparently, they are all prepared to bail if they must continue to write sinkhole cover.
There's a message to all of us in this story from the Sunshine State. Before you buy a property, always ask about the area. If there are any examples of sinkholes, landslides or other geological problems, have a survey done before you buy. This can reduce the risk of heart attacks when the home insurance quotes come in. You can find the difference in premium rates amounts to thousands a year. The key wording to look for in any policy is "catastrophic ground collapse". If it's included, check whether the cover is standard or subject to an additional premium. Then find out how much the additional premium is going to be. If it's not included, get home insurance quotes from other insurers until you find something affordable. The best decision is not to buy a home at risk. If there's no real choice, shop around to find the best policy.
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