State lawmakers to vote on elimination of sinkhole coverage

TAMPA - Sinkhole claims have nearly quadrupled in Hillsborough and Hernando counties since 2006. Now state lawmakers are on the verge of voting on a bill that could cost you your sinkhole insurance.

Hillsborough, Hernando and Pasco counties make up Florida's so-called sinkhole alley.  According to a Senate report, claims doubled and tripled between 2006 and 2009.

The Insurance Information Institute's Lynne McChristian says Senate bill 408 will seal what she calls a crack in the law.  “Claims are coming in at an astronomical level and the money coming in the door is not enough to cover that damage because it's not priced properly."

The law, she says, currently pressures insurers to pay out the entire policy no matter how minor the damage. “It says you can have sinkhole coverage for structural damage but it is not defined so it is not cosmetic damage that should be replaced and repaired it is something that should be related to the structure of the home.”

In the opposite corner is State Senator Mike Fasano who is fighting to kill a bill he insists will only hurt homeowners. “No insurance company in Florida will offer sinkhole coverage and you will have homes that have sinkhole problems.”

The head of Florida's Consumer Action Network, Bill Newton agrees with Fasano but doesn’t believe there's enough opposition to kill the bill.  “It's going pass but there is a big problem if people can't get sinkhole coverage. What about their mortgages? Because the banks require sinkhole coverage.”

So far, there is no indication the governor will veto it. Another question that remains will Citizens Insurance the insurer of last resort continue to offer sinkhole coverage once the private companies pull out.

Newton is not so sure. “We don't know if Citizens will provide sinkhole coverage or not. They are being ambiguous about it at this time.”

Tuesday afternoon, the Senate Committee on Banking and Insurance will hold a public hearing on this issue in Tallahassee. If you want your voice to be heard, contact the Senate President Mike Haridopolos: 

haridopolos.mike.web@flsenate.gov  
District Office:
3270 Suntree Boulevard
Suite 122
Melbourne, FL 32940
(321) 752-3131