Why homeowners aren't investing in sinkhole insurance

It's not a often-purchased policy, but the Land O' Lakes sinkhole shows why it's needed.

There is sinkhole insurance.  It will protect you and your family if a sinkhole damages your property.  But not many homeowners have it. 

Laura Holiga has lived in her home for 15 years.  While she does invest in flood insurance, she doesn't have coverage for sinkholes.

LINK: Settling your sinkhole claim

“You don't know if it's going to happen to you or not,” said said.  “So I guess it's an important thing to have.”

Kathy McMorrow also lives in the neighborhood.  She's  been renting her home for 2 years.
She has sinkhole insurance.

“I know that this is an area prone to sinkholes since it used to be phosphorus mines in the area, so I thought it would be wise,” she said.

McMorrow lived in Seffner prior to this.

“I was near the sinkhole they had a few years ago where the man was killed,” said McMorrow. “So that's been something that was really important to me.”

So why don't more families invest in sinkhole insurance?  The main reason is cost. It's just way too expensive and some families can't afford it.

“To give you idea, an average homeowner here in Pasco County might pay $1,000 for basic homeowner's insurance,” said sinkhole expert Taylor Yarkosky.  “To add, sinkhole insurance is an additional $3,000 to $4,000, so it's not practical and people can't do it.”

In 2011, Florida Governor Rick Scott signed into law legislation that gave insurers more power to deny sinkhole coverage. It also made sinkhole insurance separate from a basic homeowner's policy,

“I think a lot of people aren't educated on it when they should be,” said McMorrow.

That means it has made it far more difficult for homeowners to qualify for a claim leaving them stuck with sinkhole homes they cannot repair.

Yarkosky says because Florida is the most vulnerable to sinkholes, insurance companies were losing a lot of money getting them fixed.

So what can you do?

“Talk to your lawmaker.  Send an email. We have got to get some meaningful insurance back in this market,” said Yarkosky.

© 2017 WTSP-TV


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