Sinkhole and earthquake — perils excluded from standard HO-3, requiring separate policies
By Severance Calculator Editorial · Updated
The problem
The ISO HO-3 form excludes "earth movement" as a peril — earthquakes, landslides, mudflows, and sinkholes are all out unless added back via endorsement or covered by a separate policy. Homeowners in known seismic and karst zones often discover this only after a loss. In California, the California Earthquake Authority (CEA) is a separate state-chartered entity that writes the vast majority of residential earthquake policies through participating insurers. In Florida, "catastrophic ground cover collapse" is a required coverage but narrower than full sinkhole protection — the broader sinkhole endorsement is optional and increasingly hard to obtain.
The data
CEA earthquake premium on a typical $400,000 Coverage A California home runs $1,000-$3,500/yr depending on county, soil type, retrofit status, and chosen deductible (5%, 10%, 15%, 20%, or 25% of Coverage A). The New Madrid Seismic Zone (covering parts of MO, AR, TN, KY, IL, IN, MS) has elevated seismic risk per USGS but very low earthquake-insurance penetration (5-15% of homeowners). Florida sinkhole claims peaked in Hernando, Pasco, and Hillsborough counties; the 2011 sinkhole reforms (Florida SB 408) narrowed default coverage to "catastrophic ground cover collapse." Pacific Northwest Cascadia subduction zone risk is documented but earthquake-policy uptake remains under 20% in Oregon and Washington.
What to do
If you live in California, get a CEA quote through your existing carrier — even if you decline, you should know the number. In the New Madrid zone or Pacific Northwest, request an earthquake endorsement from your HO-3 carrier or shop a stand-alone earthquake policy. In Florida, verify your declarations page shows "catastrophic ground cover collapse" (required) and consider the broader "sinkhole loss" endorsement if you are in a high-karst county. In Missouri, Arkansas, and Tennessee, an earthquake endorsement runs $100-$400/yr — disproportionately cheap given the documented seismic risk.