How To Look At A House
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Should I buy a house near a sinkhole?
Monday, April 25, 2022
Insurance companies in Florida have the right to decline homeowner’s insurance if a house is near a sinkhole, even a half-mile away or more, depending the particular company’s standard for coverage. Since each insurer has their own underwriter guidelines, some will accept more risk than others, and it may be possible to be declined by one insurer and accepted by another.
Also, homes in counties that have a high occurence of sinkholes may be required to pass a sinkhole inspection as a prerequisite for insurance. See our article Where are sinkholes most likely to occur in Florida? for the top ten.
So it’s a good idea to investigate insurance coverage as soon as possible when buying a home. And, of course, having a visible sinkhole nearby not only makes insurance more difficult, it also may reduce the value of a home and limit the pool of your potential buyers when you decide to sell in the future.
All Florida insurance companies are required by law to include "catastrophic” sinkhole coverage as part of any policy. But, to meet the standard to make a catastrophic sinkhole claim, your home must have damage so significant that the local building department condemns it. Many companies offer a rider for an additional fee to cover lesser sinkhole damage.
Go to What are the Florida laws regarding sinkhole insurance? to learn more.
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