Citizens wants rate increases in Pasco higher than in any other county: an average of 66 percent for homes east of U.S. 19, 124 percent for homes west of it.
By GARRETT THEROLF
Published September 25, 2005
Last week, David Ross opened his bill from Citizens Property Insurance Corp. The premium was twice what he paid last year and came just as the insurer announced plans for another big rate increase next year.
"I went to my agent," Ross said, and asked, "What's going on? They said, "They doubled your insurance. Must be because of the hurricanes.' I said no kidding." But it's not hurricanes hitting Ross in the wallet.
It's sinkholes.
For homes west of U.S. 19, Citizens wants to raise rates an average of 124 percent. For homes east of the highway, rates would rise an average of 66 percent. The increases are the highest Citizens wants in any of the state's 67 counties.
In supporting papers for the rate increase, Citizens staffers make it clear that without sinkholes, the Pasco rate increase would have actually been below the state average of 32 percent. By comparison, the proposed rate increase for Pinellas is from 8 to 18 percent and for Hillsborough from 16 to 23 percent.
For some Citizens policyholders in Pasco, the increases would represent the third consecutive year premiums more than doubled.
Nothing Citizens sent Ross, of Port Richey, explained the sinkhole problem. In fact, the only advice his bill gave was to shop around. But Citizens' actuaries said the proposed Pasco rate is so much higher than other counties because the company will continue to pay tens of millions of dollars in sinkhole losses in the coming years.
Last year alone, the company reported paying more than $17-million in sinkhole losses.
In contrast, the actuaries predicted losing $3.3-million to hurricane losses in Pasco in an average year.
But there are even more factors working against policyholders than expected losses.
Until this year, Citizens didn't have to consider projected losses. It wasn't until the state Office of Insurance Regulation ordered the company to change its practice of simply matching the highest rate in the private market that it began to base its rates on actual projected losses.
Additionally, officials believe sinkhole losses are being inflated because not all paid claims are actually sinkhole losses.
Staffers at Citizens and the county property appraiser's office said it's likely that some damage attributed to sinkholes can actually be blamed on poor construction. Yet owners of these homes are collecting sinkhole reimbursement because the insurer cannot prove the absence of a sinkhole.
"The fact is that it's very difficult to prove a negative, that a sinkhole is not the cause," said Citizens spokesman Justin Glover. Sinkholes occur underground as the delicate lacework of limestone and caverns give way, crumbling driveways and cracking walls and foundations.
The Citizens board of governors put off a recent vote on the rate increases because the proposed rates are so high.
Pasco has 25,140 homes covered by the state-run insurer, a number growing rapidly as private insurers retreat from the county's sinkhole-plagued properties. Only 1,000 homeowners were forced to buy the company's highest-priced policies in all of the Tampa Bay area four years ago.
Paul Cameron, a Citizens policyholder in northwest Pasco, said, "If they double us again next year, I guess I'm out of the state. We're getting up near our mortgage payment."
Garrett Therolf can be reached in west Pasco at 869-6232 or toll-free at 1-800-333-7505, ext. 6232. His e-mail address is gtherolf@sptimes.com
RISING RATES
When David Ross moved to Port Richey in 2004, he got insurance from Citizens Property Insurance Corp. Every year since, his property insurance rates have increased dramatically:
