House passes sweeping property insurance bill

TALLAHASSEE -- Plans to increase the rates of state-run Citizens Property Insurance Corp. by up to 25 percent are dead in the Legislature this year.

But proposals are still moving forward in the private insurance market, most notably for sinkhole insurance.

The House on Wednesday passed a sweeping bill intended to rein in frivolous and fraudulent sinkhole claims that insurers say are draining their coffers and driving up rates for all policy holders.

Among other things, the bill would require insurance companies to only cover structural damage for primary buildings. The bill also strictly defines structural damage to minimize what have been characterized as frivolous claims for such things as hairline cracks in driveways. And it reduces the window for filing hurricane and windstorm claims from five years to three years after a storm.

Supporters say the changes will lure insurers to Florida, increase competition and lower rates.

“The state of the property insurance market in Florida is of great concern to many of us in this room. The question we’re faced with is how do we fix this market,” said Rep. John Wood, R-Haines City. “This is a first step.”

Rep. Jim Boyd, R-Bradenton, who sponsored one of the failed Citizens reform bills, lamented during debate that those proposals didn’t move forward. Citizens officials have warned that the premiums they charge their 1.3 million policy holders aren’t high enough to cover all potential losses if a massive storm hits the state. In that case, taxpayers would have to pick up the tab.

“Let’s not lose sight of the looming, potentially crippling liability hanging over our heads as Floridians,” Boyd said, noting that the bill before lawmakers may not be perfect, but it is a good start.

Opponents of the measure say it’s anti-consumer and a gift to the insurance industry.

“If this bill passes, a victim of a tragedy or loss will have less rights and less opportunity to recover for their damages,” said Rep. Rick Kriseman, D-St. Petersburg. “You better hope that the only thing falls into the hole in the ground is your home.” If your garage, swimming pool or outdoor kitchen is destroyed by a sinkhole, he said, “You’re out of luck.”

Rep. Evan Jenne, D-Dania Beach, said it would result in increased rates.

Supporters of the measure, he said, are “going to tell you big insurance is losing money hand over fist in this state, but at the end of the day we have no way of really actually knowing.”

The House voted 85-33 in favor of SB 408, which was amended Wednesday to replace language approved by the Senate last week with the House version. It now goes back to the Senate for a vote.

The Senate bill was much more extreme, freeing private insurers from having to offer comprehensive sinkhole coverage at all. Instead, they would have to offer coverage only for “catastrophic groundcover collapse,” which represents about 1 percent of sinkhole claims. People who need comprehensive coverage would have to get it from Citizens.