Insurer expects an okay today
By DAVID DeCAMP
Published January 31, 2007
Citizens Property Insurance Corp. customers in Hernando and Pasco counties will soon see big rate cuts if they drop the sinkhole coverage that has bedeviled their bills.
The Florida Office of Insurance Regulation is expected to announce today that it has approved Citizens' request to make the coverage optional - but with somewhat higher rate cuts and several stronger requirements than Citizens offered. New rates have to go into effect within 60 days.
Parts of Pinellas County will see a cut of at least 9 percent.
The cuts will be based on rates in effect at the end of 2006. The decreases will be on top of other potential savings from the recent legislative session, during which lawmakers beefed up the catastrophic fund and eased reinsurance costs.
Private insurers will soon be following Citizens in making sinkhole coverage optional, although it's unclear how much their rates will drop. The Legislature allowed them to make sinkhole coverage optional, while requiring insurers to cover catastrophic collapses that force a house to be condemned. The companies have to file new rates by June 1.
"The bill is certainly expected to produce savings," said spokesman Justin Glover of State Farm Florida.
Customers will have to sign a statement to opt out of sinkhole coverage.
Sinkhole rate cuts
Florida regulators have decided state-run Citizens Property Insurance Corp. must cut rates as part of a new option to exclude traditional sinkhole coverage. Here are the rate cuts, by percent, by county for homeowners with policies including wind coverage:
County Coastal/ Rest City
Citrus 0.2 11.4
Hern. 54.3 55.3
Hills. 6.5* 10.7
Pasco 52.8 56.8
Pinellas 0.2/1.4** 9.1
* Hillsborough's city rate is for Tampa.
** The first number is the coastal rate cut; the second is for St. Petersburg.
Source: Office of state Sen. Mike Fasano