Sinkhole Coverage in Legislative Crosshairs

By: Mike Vasilinda Email
By: Mike Vasilinda Email

Tallahassee, FL - This is not your typical sinkhole claim in Florida. This is: a cracked drive way or a cracked wall. Insurance companies have been waging a five-year battle to restrict claims, some of them fraudulent. Spokesman Sam Miller says those bad claims are costing every homeowner through higher rates.

“Everybody in Florida is paying a $120 sinkhole tax,” Miller said.

The number of claims have tripled since 2006. The industry blames lawyers for filing frivolous claims that are hard to disprove. The chairman of the Senate Committee on Banking and Insurance says the industry needs more protection.

“We’re trying to responsibly address that expansive magnitude of false claims, or claims where people are taking checks and paying their mortgages off or buying cars,” Sen. Garrett Richter (R-Naples) said.

This Pasco County couple testified at a Senate hearing last week after their insurance company refused to pay their claim. The pending legislation would require them to pay half the costs of sink hole testing if their insurer found no evidence of a sinkhole.

One of the most controversial provisions of the new legislation would say that insurance companies don’t even have to offer you sinkhole insurance.

Senator Mike Fasano has more sink hole claims in his Pasco County district than any other area of the state.

“Federal Home Loan Mortgage Cooperation, Fannie Mae, they have said ‘we want people to have full sinkhole coverage, otherwise we’re not going to offer a mortgage,” Fasano said.

The legislation comes back before a Senate Committee in two weeks.

Some lawmakers fear that if insurance companies stop writing sinkhole coverage, state run Citizen’s will be forced to pick up the extra policies.

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