A dramatic roadway collapse in Omaha, NE, made headlines this week and served as a fresh reminder of the dangers lurking beneath the surface in 35% to 40% of the United States.

On Tuesday afternoon, a large sinkhole opened up at a busy intersection, just as two cars stopped at a traffic light. The now viral video shows the vehicles dangerously sliding into the ground. Thankfully, both drivers escaped without injury and no other damage has occurred. 

But the truth is, experts say that sinkholes pose a real threat to property across the country, with one specialist in the study of groundwater saying sinkholes cost a $1 billion in losses every year.

What is a sinkhole, and who is at risk?

A sinkhole is a depression that forms in the ground caused by erosion underneath. Sinkholes can frequently occur in areas underlain by rock types naturally dissolved by circulating groundwater, such as limestone, carbonate rock, or salt beds.

Extreme weather—heavy rains, droughts, and freeze-thaw cycles—damages underground pipes, releasing water. Climate change exacerbates this by lowering water tables during droughts, cracking soils, and weakening ground stability. Compounded by aging infrastructure, which fails more easily, these factors explain the increased frequency of sinkholes worldwide.

They can also be linked to human activity, such as groundwater pumping, construction, development, and the creation of new water-diversion systems. Additionally, altering the land surface, like creating industrial or runoff storage ponds, can cause a collapse due to the substantial weight of the new material.

According to the U.S. Geological Survey (USGS), hot spots for sinkholes have developed in recent years in places like Florida, Texas, Alabama, Missouri, Kentucky, Tennessee, and Pennsylvania. 

Sinkhole occurrences are also increasing across the country. In 2024, the day after Christmas, a 40-foot-wide sinkhole opened on Interstate 80 in Morris County in New Jersey, causing months of congestion and fear among nearby residents. That was caused by an abandoned mineshaft collapsing underneath the highway.

In May 2025, a large sinkhole next to a construction site in Ventura, CA, swallowed cars and threatened nearby properties after an "incident involving the failure of temporary construction shoring" at the construction site, according to a statement from the city.

What are some signs of a sinkhole?

Nick Gromicko, founder of the International Association of Certified Home Inspectors, previously explained to Realtor.com® that there are several red flags to look out for if you’re a homeowner concerned about sinkholes. They include the following:

• Previously buried items—such as foundations, fence posts, and trees—becoming exposed as the ground sinks
• Gullies and areas of bare soil, which are formed as soil moves toward the sinkhole
• A circular pattern of ground cracks around the sinking area (“Sudden earth cracking should be interpreted as a very serious risk of sinkhole or earth collapse,” notes Gromicko.)
• Formation of small ponds as rainfall accumulates in new areas
• Interrupted plumbing or electrical service to a building or neighborhood due to damaged utility lines
• Plants that wilt and die because their water is drawn away by the sinkhole
• Slumping or falling trees or fence posts

If you’re interested in purchasing property that’s located in an area known for sinkholes, hire a qualified home inspector to check for them, advises Tony Diana, owner of Advanced Pier Technologies and The Sinkhole Guy, a sinkhole and foundation repair company.

“They’ll know the difference between, say, stucco cracking and structural movement,” he says. “They’ll also know if you need to hire a structural engineer or a sinkhole repair company.”

Does your insurance cover sinkholes? 

With all of that said, experts still agree that the risk of a sinkhole developing on your property is low when compared to other natural disasters.

Because of that, many standard insurance policies exclude sinkholes from coverage. Like flood insurance, homeowners in danger zones for earth movement and infrastructure-related damage related to sinkholes will need to invest in gap coverage to avoid out-of-pocket costs

Because those costs can rack up. 

“There is no national plan for sinkholes,” George Veni, a hydrogeologist who spent 16 years as the executive director of the National Cave and Karst Research Institute, recently told Slate Magazine. 

The USGS estimates that sinkholes cause a minimum of $300 million in road damage annually in the U.S. However, Veni suggests this is a conservative figure, as some states combine sinkhole damage with other repair costs. He estimates the total annual loss caused by sinkholes is actually "over $1 billion."

Michael Plactere, owner of WeBuyLongIslandHomesFast.com, learned this firsthand in February 2018. Just as he was about to board a plane for a business trip, he received a call from his wife that his car had fallen into a sinkhole right in their driveway. They were caught completely off guard.

“The ground felt mushy, but I didn’t think much of it,” he explained, which was expected, given the heavy rainstorm the night before. But as you can see from the photos above, the ground opened up. Thankfully, though, the car didn’t plunge into the gap like in Omaha. 

In the end, his car insurance covered towing and minor damage, leaving him with about $1,000 out-of-pocket expenses to cover to fix the car. As for the driveway, that repair was another $1,000, with no homeowner coverage.