Glossary

Sinkhole loss

Structural damage to a building, including its foundation, caused by ground settling into underground voids, excluded unless the policy adds sinkhole coverage.

Also called: sinkhole coverage, sinkhole activity, sinkhole damage

A sinkhole loss is structural damage to a building, including its foundation, caused by sinkhole activity. Standard homeowners forms treat sinkholes and subsidence as earth movement and exclude them, which is why states with limestone geology address the subject by law.

Florida, where sinkholes are most common, is the clearest example. Section 627.706 of the Florida Statutes defines sinkhole activity as settlement or systematic weakening of the earth supporting the building, caused by soil, sediment or rock moving into voids that water has created in limestone or similar rock. Every Florida property insurer must cover catastrophic ground cover collapse, and must also offer coverage for broader sinkhole loss for an additional premium. Contents and additional living expenses apply only when the building has structural damage caused by sinkhole activity.

Say cracks appear in the walls of a Florida home and an engineer confirms sinkhole activity beneath it (hypothetical). Whether the policy pays depends on whether sinkhole coverage was bought, and claims commonly require testing by a licensed engineer or geologist. Outside Florida, ask whether your insurer offers a sinkhole endorsement. Cracks from ordinary soil settling are not a sinkhole loss, and they are routinely denied. The guide sinkhole and catastrophic ground cover collapse coverage explains how these claims work.

Last reviewed October 10, 2026

In the index now

Related terms

Catastrophic ground cover collapse A Florida-defined event in which the ground abruptly collapses, a visible depression forms, the building is structurally damaged and authorities condemn it. Earth movement A group of ground-shifting events, including earthquake, landslide, mudflow, subsidence and sinkhole, that homeowners policies exclude from coverage. Exclusion A policy provision that removes coverage for a stated cause, type of loss, property or circumstance that the coverage would otherwise reach. Endorsement A written change attached to a policy that adds, removes or alters coverage, limits or conditions, and controls over the base form wherever the two conflict. Deductible The amount of a covered property loss you pay yourself before the insurer pays the rest, shown on your declarations page as a dollar figure or a percentage.

Related guides

The earth movement exclusion explained What the HO-3 earth movement exclusion removes, what it leaves covered, how it differs from settling and flood exclusions, and how to challenge a denial. Foundation cracks and settling: what's covered A standard homeowners policy excludes settling, soil movement and water pressure, so cause decides whether foundation damage is paid. What is covered. Sinkhole and catastrophic ground cover collapse coverage explained Standard policies exclude sinkholes. Florida requires collapse coverage and an offer of sinkhole cover; here is how those claims work.

Related insurers

Cypress Property & Casualty Jacksonville, Demotech-rated insurer selling homeowners, condo and rental policies through agents in Florida and Texas, with a deductible installment plan.

Related states

Tennessee Tennessee home insurance: State Farm and Farm Bureau write 40% of a $3.86 billion market shaped by tornadoes, hail, ice storms and earthquake risk.