If you live in the southeastern United States, you’re probably already familiar with sinkholes and the insurance policies to help recover from their damage. But conversations with clients about sinkholes can get complicated quickly, especially when it’s important to distinguish between sinkholes and what’s known as catastrophic ground collapse.
 
Coverage for catastrophic ground collapse is offered in Aon Edge’s. Other key features include:

• Customized coverage limits and deductible options

• Up to $1,250,000 building and $875,000 contents coverage

• Option for $5,000 in Additional Living Expenses plus $500 in food spoilage coverage

• Option for $1,000 swimming pool clean-up protection

 

What causes a sinkhole?

Broadly speaking, sinkholes are depressions or holes in the ground that occur as a result of shifting geological activity beneath the surface. Often, this is caused by water collecting in a depression with no place to drain except through the subsurface. Over time, as water percolates through soil that is high in soluble minerals like limestone and gypsum, the subsurface layer dissolves, leaving voids that can further collapse the ground above. This type of landscape is also known as karst.
 

Where do sinkholes occur?

When we hear the word “sinkhole”, we often think of Florida. But according to the U.S. Geological Survey, sinkholes are most likely to be found in the following states:

• Alabama: On December 2, 1972, the Golly Hole opened up when an underground aquifer collapsed. As one of the country’s largest sinkholes, it measured 325 feet long, 300 feet wide, and 120 feet deep.

• Florida: Limestone runs underneath most of the state, making sinkholes a widespread hazard. Groundwater actually helps to keep the land above it stable. When drought strikes, followed by heavy rains, the ground is at an increased risk to collapse.

• Kentucky: About 55% of the state sits atop rock that is prone to sinkhole development. You may remember headlines from 2014 when a sinkhole opened underneath the National Corvette Museum, devouring eight sportscars from the collection.

• Missouri: Carbonate bedrock and limestone in Missouri’s geology have led to about 16,000 sinkholes reported across the state.

• Pennsylvania: Erosion of limestone and dolomite deposits can cause sinkholes, mainly in the Lehigh Valley. Hurricane Ida, which drove intense rain into Pennsylvania, spurred the most recent occurrence of sinkholes.

• Tennessee: Grassy Cove, located between Nashville and Knoxville, is considered by some to be the nation’s largest sinkhole, at eight miles long and three miles wide. The erosion that formed it occurred over time, not in a sudden collapse, as we typically picture sinkholes.

• Texas: Winkler County in West Texas is home to two growing sinkholes, known as the Wink Sinks, that are expected to expand and eventually connect. Oil and gas drilling in this area led to the influx of water that continues to dissolve mineral deposits and widen these holes.

Sinkholes can cause quite a bit of damage – an average of $300MM per year for the past 15 years – and there are specific insurance policies to help recover from them. Catastrophic ground collapse, while typically related to sinkhole activity, is defined in a specific context.
 

What is catastrophic ground collapse?

In order to be considered catastrophic ground collapse, there must be geological activity that results in all of the following:

1. The abrupt collapse of the ground cover;

2. A depression in the ground cover clearly visible to the naked eye;

3. Structural damage to the building including the foundation; and

4. The insured structure being condemned and ordered to be vacated by
   the government agency authorized by law to issue such an order for that structure.

All of the above conditions must be met in order for the Catastrophic Ground Collapse component of the EZ Flood insurance policy to apply, subject to the policy terms and conditions. If coverage is available as a result of a Catastrophic Ground Collapse, the claim payment is subject to the policy deductible and loss limitation detailed in the policy and summarized on the declarations page.
 
If any one of the above requirements is not met, it’s not considered Catastrophic Ground Collapse. For example, if a homeowner experiences a sinkhole on their property and their foundation cracks, but the structure is not condemned as uninhabitable, then Catastrophic Ground Collapse will not apply.
 
Catastrophic Ground Collapse is a part of EZ Flood coverage. Want to learn what else an EZ Flood policy includes? Download our highlight sheet or contact us for more information.
 
_{This article is provided for general informational purposes only and is not intended to provide individualized advice. All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.}