A lot of customers see a coverage added to their policy called “sinkhole endorsement” and wonder why the coverage is in addition to the main portion of the policy. Naturally they ask us whether or not they truly need sinkhole coverage living in Tennessee. So let’s take a look at some of the compelling reasons that you should have sinkhole coverage on your homeowners insurance policy.
EARTH MOVEMENT IS EXCLUDED UNDER MOST HOMEOWNERS POLICIES
If you take a look at your homeowners insurance policy, you will most likely find the following paragraph or one similar under theexclusion section (items or perils not covered) of the policy:
Earth Movement meaning:
a. Earthquake including land shock waves or tremors before, during or after a volcanic eruption;
b. landslide; mudslide, or mudflow;
c. subsidence or sinkhole; or
d. any other earth movement including earth sinking, rising or shifting;
caused by or resulting from human or animal forces or any act of nature, unless direct loss by fire or explosion ensues and then we will pay only for the ensuing loss.
This paragraph means that damage to your home caused by any of those listed causes is not covered, leaving you to pay for the damages on your own. So when your policy has the sinkhole endorsement, it means that the policy is giving you back coverage caused by a sinkhole but not earthquake or any of the other listed causes of loss in that paragraph.
WHAT MAKES TENNESSEE SUSCEPTIBLE TO SINKHOLES?
Much of the soil across Tennessee and Kentucky is formed from Limestone. This type of rock and soil is particularly porous which means that water runs through it easily. Over time the flow of water can erode the soil and create caverns below the surface. When the weight of the surface becomes too great for the cavern below, it suddenly collapses.
HOW BIG OF AN ISSUE IS IT?
Most people associate sinkholes with coastal areas such as Louisiana or Florida. People watch the news and see clips of entire homes collapsed. Many of you are familiar with the damage at the Corvette Museum where the entire museum showroom floor collapsed and caused several million dollars worth of damage to the building and historic cars inside. Check out some of these sinkhole related headlines from the last couple of years:
As you can see, sinkholes can occur just about anywhere in the US. According to http://tnlandforms.us/landforms/sinks.php, Davidson County has over 600 sinkholes greater than 8 feet deep. While an entire home engulfing sinkhole may not be extremely likely, smaller sinkholes are common and can still cause enormous amounts of damage to your home. One of the most common causes of sinkholes in middle Tennessee is broken water pipes below the surface. For example, a water line breaks in your back yard and goes unnoticed for months. Over time, the water erodes the soil below the surface. All of the sudden one afternoon after a heavy rain, you come home to find that there’s a 3 foot hole and the rear corner of your home has completely collapsed.
The obvious question most people then ask is, “is it worth the cost?” When you look at the cost of sinkhole coverage, it depends on the size of your home. However, the cost is very reasonable, sometimes as low as $40/ year. If your home is your largest investment or holds a considerable portion of your personal net worth, you really should protect it to the greatest extent. By comparison, if you had $300,000 in the stock market, would you pay $40/ year to prevent it from losing $40,000 in value?