If you're a homeowner in Missouri, you can now purchase sinkhole coverage through the FAIR Plan, the state's insurance of last resort. The plan started issuing the standalone Sinkhole Loss policy earlier this year to supplement the homeowner's primary coverage.
"The availability of sinkhole coverage through the FAIR Plan is a positive step in the right direction," said Missouri Department of Insurance Director John M. Huff in a statement. "I applaud Governor Nixon and the legislature in enacting Senate Bill 691 that gives consumers more insurance coverage options."
What is a sinkhole? It's a depression or hole in the ground caused by collapses in the layers below the surface that can form gradually or suddenly. Most homeowners policies exclude coverage for sinkholes, and it's difficult to find an insurance company that offers the coverage even on an optional basis.
If you purchase sinkhole coverage through the FAIR Plan, your home and personal belongings are insured against damage resulting from the abrupt collapse of the ground. The FAIR Plan coverage won't cover damage resulting from settling foundations.
No earthquake coverage—yet
The FAIR Plan, like most homeowners insurance policies, won't cover damage resulting from an earthquake. According to a July 2014 report from the U.S. Geological Survey, the New Madrid Fault, which runs through a number of midwestern states including Missouri, has been identified as an area that has potential for larger and more powerful quakes than previously thought.
The legislature is currently considering legislation that would also allow the FAIR Plan to offer earthquake coverage. Currently, only about 33% of residences in Missouri have earthquake coverage.
To obtain information about FAIR Plan coverage, call 800-392-7240 or visit the website.
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