Insured Homeowner Feels Soaked Over Shower

Dear Insurance Adviser,

In checking out homeowners insurance costs, I've noticed that some of the companies require a sinkhole inspection first. What is this, how do they inspect and what happens if my property here in Florida has a propensity for sinkholes? Will I be denied coverage from all companies in some database?

- Sally

Dear Sally,

The insurance industry has no central database or clearinghouse of homes that have been turned down for sinkhole insurance coverage. So, if you're declined by one insurer after an inspection, that information is not shared with others.

Florida law requires that all property policies include coverage for "catastrophic ground cover collapse," though that doesn't necessarily mean sinkholes. But the law further requires insurers to offer optional sinkhole coverage. That optional coverage can be contingent upon passing a geological test.

The testing -- done by qualified, licensed, geological testing companies -- costs about $150. Some insurance companies will pay the whole test cost, while others pay 50 percent. But most don't pay any portion. If the insurance company helps pay the testing fee, the property owner must use the insurer's testing firm.

According to Jay Williams, a vice president of UPC Insurance in St. Petersburg, Florida, it's in the best interest of a property owner to pay the entire cost of the test yourself. Then, you can use whatever testing firm you choose.

If your home passes the test, it makes it far easier for you or your agent to shop your homeowners insurance. And it makes you automatically eligible to purchase the optional sinkhole coverage.

But what if your property doesn't pass the test? You can hire another firm to retest. Or, if you already have sinkhole coverage, you can smile and pay premiums on time for the policy that you now have.

As an insurance agent operating in Minnesota, I know a lot about blizzard insurance and mosquito liability but know very little about Florida and its unique sinkhole insurance issue. So, many thanks to Williams and to David Thompson of the Florida Association of Insurance Agents for sharing their expertise with me.

Good luck, Sally. I hope this helps.

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