MO SB445

Every insurer authorized to write homeowners' or dwelling-owners' insurance in Missouri must make sinkhole loss coverage available as an optional add-on for an additional premium, effective January 1, 2014.

Insurers that exclude sinkhole coverage must inform policyholders in bold 14-point type that the policy does not cover sinkhole losses and that additional coverage is available for an additional premium.

When investigating sinkhole loss claims, insurers must inspect the premises and, if physical damage exists but the cause cannot be identified or is consistent with sinkhole activity, obtain written certification from a professional engineer, geologist, or director-approved qualified individual before denying the claim.

Policyholders who submit sinkhole claims without good faith grounds must reimburse the insurer for 50 percent of analysis costs or $2,500, whichever is less, provided the insurer informs them of potential liability before ordering the analysis.

Sinkhole coverage applies to actual physical damage from sudden settlement or collapse of earth caused by water action on limestone or similar rock formations; contents coverage only applies if structural damage to the building occurs.