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Politics

Sinkhole coverage bill still alive

By DAVID DeCAMP
Published January 12, 2007

Pasco County lawmakers' proposal to make sinkhole coverage optional and lower insurance rates has been left out of the Florida Senate's first stab at insurance reform.

Instead, the draft bill in the Senate insurance committee includes changes that Pasco attorneys and state Sen. Mike Fasano worry will be less effective at lowering rates.

A bill by Fasano and Rep. John Legg would remove the mandate for insurers to offer sinkhole coverage.

The Senate committee bill would continue the requirement and redefine sinkhole damages.

The bills are part of the Legislature's special session starting Tuesday. Committees in the House and Senate began discussing proposals this week. Area lawmakers will push to get the Pasco version into the Senate bill next week.

Pasco leads the state in sinkhole claims by far, and private insurers and state-run Citizens Property Insurance Corp. say those claims have caused severe rate hikes in the county. The claims also have jacked up rates in Hernando, Hillsborough and north Pinellas counties.

Citizens has asked state regulators to allow it to make sinkhole coverage optional in standard homeowner policies starting March 1. If it does, the insurer promises rates could drop as much as 58 percent in Pasco, and up to 45 percent in Hernando. But premiums would actually rise if customers included sinkhole coverage.

Fasano and Legg want to change state law to mimic the Citizens proposal. In their bill, which was filed Thursday, insurers would be required to offer coverage within seven days for "catastrophic collapses" that leave a house condemned by a government agency. Private attorney Timothy Volpe of Jacksonville, who was hired by the county to fight for lower rates, helped write their bill.

House Republican leaders included that proposal in their draft bill this week.

But the Senate insurance committee's bill, offered by the chairman Sen. Bill Posey, would be different. That bill would limit coverage of sinkhole losses to damages that cause collapse or leave 5 percent of a building uninhabitable.

Posey, R-Rockledge, said he wanted to tighten the definition of a sinkhole. That idea was discussed but not passed last year. Doing so could reduce claims and drop rates, he said.

"People would know up front, we're not paying for settlement and cracks anymore," Posey said.

But Pasco officials disagree that the Senate changes will reduce claims by much.

"You're not getting out of what we have now, which is we have settlement and cracking claims being filed as sinkholes," said assistant county attorney Elizabeth Blair of the committee bill.

Blair also said the committee bill will make it more difficult to allow sinkhole coverage to become optional. The committee bill also fails to specify who and what would decide when 5 percent of a home is uninhabitable, she said.

Posey said insurers would still have the flexibility to make sinkhole coverage optional under the Senate committee proposal.

Fasano has asked Posey to change the committee bill to include the Pasco-supported changes. Because leaders in the House have included changes pushed by Fasano and Legg, chances are good the Senate will do likewise, Fasano said.

Posey said he had learned of the Pasco-supported bill Wednesday but has not read it. "It has a chance," Posey said.

David DeCamp can be reached at (727) 869-6232 or ddecamp@sptimes.com

[Last modified January 11, 2007, 23:03:50]