Sinkhole Loss vs. Catastrophic Ground Cover Collapse
Also called: catastrophic ground cover collapse, CGCC, sinkhole coverage, sinkhole activity, structural damage definition
Homeland Public Adjusters · Last reviewed: October 2026
Florida law splits ground-movement losses into two coverages. Catastrophic ground cover collapse (CGCC) is mandatory on every property policy (§627.706(1)(a)) but requires all four of: an abrupt collapse of the ground cover, a depression clearly visible to the naked eye, structural damage to the building including the foundation, and condemnation and an order to vacate by the government agency. Sinkhole loss coverage is optional, bought for an additional premium (§627.706(1)(b)), and covers structural damage caused by sinkhole activity without the collapse-and-condemnation test.
Full guide: Warning Signs of a Sinkhole in Florida
The four-part CGCC test
All four conditions must exist. A house with cracked walls, a sloping floor and a depression in the yard that is still standing and occupied does not meet the test, because it has not been condemned. That is the design: CGCC covers the house that falls into the ground, and almost nothing short of it. Most Florida homeowners whose policy “covers sinkholes” have only CGCC.
Sinkhole loss coverage
If sinkhole coverage was added, the policy covers “structural damage to the covered building, including the foundation, caused by sinkhole activity” (§627.706(2)(j)). Structural damage has its own definition in (2)(k): interior floor deflection beyond tolerance that makes the interior unusable, foundation movement that overstresses load-bearing members, dangerous leaning or buckling of load-bearing walls, significant risk of imminent collapse from ground movement, or substantial structural damage under the Florida Building Code. Cosmetic cracking does not qualify. Insurers may require an inspection before issuing the coverage, and residential policies may carry a sinkhole deductible of 1%, 2%, 5% or 10% of the dwelling limit, with a premium discount for each.
How a sinkhole claim is handled
The insurer must engage a professional engineer or geologist to test for sinkhole activity once structural damage is shown, and if testing confirms it, the statute sets out how repairs are paid: stabilization and foundation repairs are performed under the insurer’s direction and paid to the contractor as work is done, which is why sinkhole settlements rarely come to the homeowner as a check. A public adjuster’s role is proving structural damage under the (2)(k) definition and the scope of the cosmetic and interior repairs around the stabilization.
New Jersey
New Jersey has no sinkhole statute. Earth movement, including sinkholes, is excluded on standard policies there, and coverage exists only by endorsement; abandoned-mine subsidence in some northern counties is the closest analogue and is also excluded unless added.
Where Florida sinkhole claims happen
Pasco, Hernando, Citrus, Marion, Polk and Hillsborough counties carry most of the state’s sinkhole activity, which is why our Central Florida pages cover it. Warning signs are in our sinkhole warning signs article.
Frequently asked questions
Does my Florida homeowners policy cover sinkholes?
What counts as structural damage for a sinkhole claim?
Why was my sinkhole payment sent to the contractor?
Related terms
A policy exclusion is a provision that takes a cause of loss, a type of property, or a situation out of coverage that the insuring agreement would otherwise provide.
Ordinance or law coverage pays the increased cost of repairing or rebuilding damaged property to comply with current building codes, including demolition of undamaged portions that code requires you…
A proof of loss is a sworn, signed statement from the policyholder setting out the date and cause of the loss, the property involved, the interest of the insured and others, other insurance, and the…
The appraisal clause is a provision in most property policies that lets either the policyholder or the insurer demand appraisal when they disagree on the amount of a covered loss.
If this is your loss, call Homeland before you talk to the insurance company: Florida (305) 783-3777, New Jersey (732) 517-3777, 24 hours. A licensed public adjuster reviews the claim for free and calls you back right away. No Recovery, No Fee.
Sources
This article is for general information only and is not legal or insurance advice. Statutes, regulations and policy wording change, and how they apply depends on your own policy and the facts of your claim. Homeland Public Adjusters is a public adjusting firm, not a law firm.
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