Sinkhole Surprise

One day to go in the Florida legislative session and the fate of a massive insurance reform effort inspired by last year’s hurricane season is up in the air.

There are still major differences to be worked out between the House and Senate versions. One sticking point is sinkholes.

Lawmakers vowed to revamp the state’s insurance system after last year’s disastrous hurricane season. Proposals include spelling out exactly what’s covered and what isn’t in your homeowner’s policy and how much your deductible will cost you. But one amendment would require owners of sinkhole-damaged homes to sign contracts to get the house stabilized before the insurer would pay for the damage.

Attorney Peter Napolitano came to the capitol to fight the measure. He has got many elderly clients who are afraid of their damaged homes and just want to move. "Under the measures of this bill, those people would have no benefits available to them under the policy. As a matter of fact, they’d be forced to continue to pay a mortgage on a house that’s unrepaired, that they haven’t gotten a penny for and that now would be rendered uninsurable."

Representative David Russell says the provision would take away property owner’s rights. "Frankly, the individual should have the ability to contract on their own to repair their home or if they don’t care to repair that home, to use it to buy another home.
That should be their prerogative.”

But even the champions of consumer's rights say insurance reform needs to include projections against fraud. This would include frivolous sinkhole claims.

Florida’s Chief Financial Officer says, "There’s been quite a bit of fraud with sinkholes where people have collected money, not fixed the home, taken the money, sold the house at a low price to someone else whose gotten it insured and then tried to collect for another sinkhole, so I do think that that is not good because we all pay for it."

The fear now is nothing may get done on insurance reform because too many questions remain and time is running out. The insurance reform bill is awaiting preliminary passage in the Senate. The legislative session ends at midnight Friday.