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Sinkhole bill backers predict rate relief
Cutting the number of insurance claims should help tame rising rates, sponsors say.
By GARRETT THEROLF
Published May 9, 2006
The so-called sinkhole bill won passage in the Legislature last week, and sponsors heralded it as the fulfillment of a key demand by Pasco and Hernando constituents: immediate relief from skyrocketing property insurance rates.
"I think we are going to see a significant drop in sinkhole claims, and as a result, rate increases will not be as severe," said state Sen. Mike Fasano, R-New Port Richey.
Key provisions include:
The introduction of an alternative mediation process to try to resolve claims disputes outside the courtroom. Lawmakers said the process would eliminate fees currently paid to lawyers who dispute claims on behalf of homeowners.
The option for insurers to expand upon the current $500 deductible for sinkhole claims with higher sinkhole deductibles that would lower premiums.
An analysis by the Office of Insurance Regulation to determine what rates should be as the result of the changes. Left out of the bill - in a compromise with the Academy of Florida Trial Lawyers - was a provision originally sought by sponsors to place a cap on attorney fees for policyholders who take their dispute past the mediation process to court.
The sponsors also dropped their demand to raise the burden of proof that a sinkhole be the "clear and convincing" cause of cracks and home damage. Fasano and House sponsor John Legg, also a Republican from New Port Richey, said Gov. Jeb Bush would almost assuredly sign it into law.
Yet the bill faces significant hurdles, according to lawyers and insurers.
Craig LaValley, a lawyer who files sinkhole lawsuits on behalf of policyholders in Pasco and Hernando counties, said the mediation process "will just create another layer of bureaucracy that people have to go through."
Chris Neil, a spokesman for State Farm Insurance, one of the private insurers lawmakers hope to lure back into the market with the bill, said he wasn't sure that the company would be able to increase its exposure .
"We are at capacity in almost every area of the state," he said.
[Last modified May 9, 2006, 00:41:15]
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