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How Can Sinkholes Affect Your Property Value

In Residential Blog Posts by John Topa

Sinkholes are never a good sign, especially when they’re around or on your property. Between getting them fixed and the potential devaluing of your property, sinkholes can lead to a costly situation. From proximity to sinkhole repair, read on to see how sinkholes could affect your property value.


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When trying to figure out whether or not a sinkhole will affect your property, proximity is the first factor to take into consideration. Generally, the closer a sinkhole is to your property, the more it will negatively impact your property value. Sinkholes that are close enough to cause structural damage will have the biggest impact on the value of your property.

In some cases, sinkholes can cause a home to collapse, resulting in a total loss for the homeowner. In other cases, if the sinkhole is far enough away and is treated properly, it could result in no damage or loss of value to a home.

Insurance Coverage

Another factor that can influence your property value is the addition of property insurance, whether for you or for a potential buyer. Some states, like Florida, require insurance companies to offer sinkhole coverage to policyholders for an additional premium although this kind of coverage can be very expensive. It’s also important to note that sinkholes caused by man made structures, like wells or piping, are not covered by most insurers.

Additionally, sinkhole insurers cover catastrophic ground cover collapse, which is great, but only for the worst kind of sinkhole. This specific insurance only covers instances where the ground has collapsed and resulted in a visible depression on your property and not gradually forming sinkholes.


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If your property has suffered damage due to a sinkhole, getting it fixed quickly and effectively is paramount. Property with sinkhole repairs could potentially lose value, however taking care of damages is a great way to mitigate the decrease in property value, especially if you use a certified engineering company. Make sure to acquire copies of any documents associated with the sinkhole repair as these will be useful when trying to sell your home; buyers want to see that you’ve taken the right steps to fix issues on your property.

If you’ve only fixed the symptoms of the sinkhole, however (like cracks or sagging doors), your property will likely suffer a penalty to it’s worth. How much of a loss is determinable only by a licensed property appraiser, who will account for the approximate damage done to the home and reduce the value based on the current market conditions and required structural repairs.

Resell Value

Often times, homes with damage from sinkholes will not sell as quickly or for as much as homes that have not suffered sinkhole damage. If you’re in the market to buy, a home with sinkhole damage may be the cheaper purchasing option, but your costs will creep up gradually, especially when taking into consideration insurance for the property as well as resell value. Generally, if you purchased property with sinkhole damage at a lower price, you’ll have to sell at a lower price as well.

If you see any of these sinkhole warning signs, reach out to us here for an inspection. It’s better to deal with any potential sinkholes on your property as quickly as possible, rather than waiting.