Watch Out for Property Insurance Policy Tricks

In Residential Blog Posts by John Topa

insurance policy

I recently received my homeowners insurance renewal policy. I’ll admit that I usually breeze through the paperwork and look at the bottom line. How much is this going to cost me? This time, however, I was immediately blasted with an IMPORTANT NOTICE. COVERAGE FOR “SINKHOLE LOSSES” IS NO LONGER MANDATORY.

Since I work for Helicon Foundation Repair, I already knew this was the case, but it made me wonder how many homeowners out there don’t understand the impact this can have on their largest investment, their home. The IMPORTANT NOTICE went on to describe the “two new options to help our customers save money on their property insurance.” 

Option 1: You may remove sinkhole coverage and receive a premium credit.

Option 2: You may choose a higher deductible for “Sinkhole Loss Coverage.”

The next page prompted me to choose an option. The “Renewal Sinkhole Loss Coverage Selection/Rejection” page gave the option to either REJECT Sinkhole Loss Coverage or SELECT Sinkhole Loss Coverage with a 10% Deductible.

This seemed slightly underhanded to me. My insurance company made it seem as though these were my only options. Choose one! Choose one now! Hurry, before it’s too late! 

That’s when I realized there was one other option: I could also choose to keep my current sinkhole coverage without making any changes to the policy.

I live in Hillsborough County, Fla., which ranks #3 in the state for total number of sinkhole occurrences. Still, I’m not sure I would understand the importance of Sinkhole Loss Coverage if I didn’t work for a sinkhole repair company. My guess is that this tactic will either dupe homeowners into thinking those are their only options, or entice them with the potential to save some money. 

In my latest blog post, “I have a sinkhole! Now what do I do?,” I compared sinkhole repair to surgery. There are certain risk factors you need to consider before electing to drop your coverage. Living in “sinkhole alley” is equivalent to having a family history of heart disease. Saving money is important, of course, but you’re going to want to have coverage just in case your house ever needs surgery.