Does homeowners insurance cover sinkholes?

Yes, if all four elements of the following are present:

1. There has to be an abrupt collapse of the ground cover.
2. There has to be a depression in the ground that is clearly visible by the naked eye.
3. There must be structural damage to the building, including the foundation. Just because there is a hole in your lawn, does not cover it.
4. The insured structure has to be condemned by the appropriate authorities in that community.

If all four elements are not met, then the coverage would fall under settling and that would depend on if the house has coverage or not.