The Market Opens Up for Sinkhole Insurance

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No one expects to go to bed at night and be swallowed up by a giant sinkhole. It is more the storyline of a Stephen King novel.  It’s nothing you can prepare for. It’s not even something in the realm of possibility for most people. But for Jeff Bush, and his family, the worst nightmare became reality. Just after saying goodnight, his brother heard a huge crash, and Jeff, his bed and the entire bedroom floor had been swallowed up in a giant sinkhole that opened up under the house.

 

Doris Jenkins, of Bethlehem Township, Pa., went to walk her dog one morning, only to discover a 20-foot sinkhole had opened up in her driveway. She had to relocate to a hotel for a day. Instead of a freak of nature, a crumbling, 40-year-old sewer pipe was the culprit. Fortunately, her home wasn’t swallowed as well.

 

Home buyers have to have homeowner’s insurance to get a mortgage. Depending on the amount of the down payment, mortgage insurance can be required.  Living near the water or in a flood plane? You may be required to purchase flood insurance. But who would even consider sinkhole insurance? The sensational and scary story of Jeff Bush and the sinkhole that took his life has prompted a lot of buzz about this not-so-rare uncertainty. In fact, an article in Business Insider, “Homeowners Probably Don’t Know They Need Sinkhole Insurance,” reports the Florida sinkhole disaster is making a lot of people call their insurance agents to find out about their exposure to this new terror. 

 

According to the U.S. Geological Survey, 35 to 40 percent of the United States is susceptible to sinkholes. There have been plenty in Florida, but as Doris Jenkins can verify, Pennsylvania has had its share.

 

Sinkholes cause structural damage. In Doris Jenkins situation, her driveway disappeared with potential threat to her home. The Bush home, damaged beyond repair, was demolished. A regular homeowner’s policy doesn’t  cover sinkholes. Many homeowners aren’t aware they live in that 35 to 40 percent of the country where a sinkhole could suddenly swallow up their home, yard or a car in the driveway. Are they covered?

 

So, homeowners, beware. The entire State of Florida, Central Florida in particular, is prone to sinkholes. That should send Florida homeowners to their Smartphones, calling their insurance brokers to get the latest coverage. In fact, put your agent on speed dial. It’s no surprise that Florida is a hazard area. But Pennsylvania, Missouri, Texas, Kentucky, Tennessee, and the Central Plains states, says the article, are prone to sinkholes as well. 

 

Many homeowners opt out of the coverage because it’s a separate policy and can be expensive. Others may not even know it exists, and that they even need it. While Florida and Tennessee homeowner may take sinkhole insurance in stride, others may not. The possibility may seem so remote that they can’t imagine it ever happening to them. Unfortunately, the time to get it isn’t when a sinkhole opens up and convinces a homeowner that they are a reality.

 

What’s a homeowner to do? A State Senator in Pennsylvania urges insurance brokers to inform homeowners that a regular insurance policy won’t protect them against sinkhole damage. Even better, homeowners need to be proactive and ask. If any good can come from the tragedy in Florida, the increased awareness of this hidden danger and the need for sinkhole insurance is one positive that can help guard against other unexpected tragedies.

 

Photo Courtesy of Wikimedia

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