Homeowners are likely to receive unwanted news from the bad gift they received on Christmas Eve.
Homes damaged on Christmas Eve in suburban Detroit are unlikely to be covered by sinkhole insurance. Experts are saying that while homeowners should still file claims with their insurers, much or all of the damage from the Fraser sinkhole is unlikely to be covered.
Standard insurance policies contain exclusions when it comes to perils such as sinkholes.
Sinkhole insurance is frequently quite uncommon due to the careful wording of homeowners insurance policies. They contain exclusions for many of the types of damage that can be caused from a sinkhole. They point to damage “directly or indirectly” caused by earth movement, mud, water and other factors.
In this light, the lack of coverage for sinkhole damage is similar to a standard home insurance policy’s lack of protection against earthquakes and overland flooding.
Experts are saying that the majority of sinkhole insurance claims are going to be denied.
Still, they also say that it doesn’t hurt to make a claim. A partial payment may be obtained. That said, even in the very likely event that the claim is denied outright, homeowners may still have other options. It all depends on the amount of time and money the policyholders are willing to spend.
That said, a concurrent causation provision may very well stand in the way of the possibility of a settlement for homeowners, too. The reason is that it states that if a home is damaged by one provision but where it is excluded from another, it is the exclusion that is the controlling factor. This could likely mean that homeowners have little to no chance of insurance payment or settlement.
The Fraser sinkhole in suburban Detroit was likely caused by a broken sewer line, say city officials. It was discovered on Christmas Eve and the hole rapidly formed, damaging homes in the area. Twenty two of them were evacuated, worrying businesses and residents in the surrounding area, as well. Police blocked off a segment of 15 Mile Road from Hayes Road to Utica Road.
This is not the first time this type of event has impacted the area. Sinkhole insurance was also lacking in 2004 when one formed under a mile away.