'A deluge of empty houses'

Article and Video Courtesy of FOX 13 -- Tampa Bay

By Peter Linton-Smith

Published July 30, 2011

 Watch VIDEO

TAMPA - It's official, and some suggest a 429 percent increase in Citizens Insurance sinkhole policy rates is all but a done deal.

"I think it's pretty likely," attorney Sean Shaw reluctantly acknowledged just minutes after Citizens' Board of Governors signed off on the rate increase request.

Shaw is the former Insurance Consumer Advocate for Florida. He now works helping Bay Area homeowners who have disputes with their insurance companies.

"Citizens has their people who have said 400 percent statewide average is what they need. I've heard their spokesperson say that, so I assume they have some numbers to back that up," Shaw said. "You cannot justify that to me. That is outrageous."

On Wednesday, the Citizens' board voted unanimously to ask the Office of Insurance Regulation to approve a massive increase in rates charged for sink hole coverage.

The Bay Area would be hit with some of the highest rates. Rates in part of Hernando County would jump by 323 percent; in Tampa, sinkhole policies would increase by a stunning 2,239 percent.

In Pasco County, long considered to be en especially active sink hole area, policies are already expensive, averaging $1,300.00. Those policies could increase to $4,400.00, a 201 percent increase.

"There is going to be a deluge of empty houses in west Pasco," according to Allan Schwartz. He is president of the River Crossing Home Owners Association. Schwartz said his 359-home subdivision has weathered the foreclosure storm well. He is not so confident he and his neighbors can survive the Citizens' rate increase.

"People just walk away...what can you do?"

Schwartz spent much of Wednesday on the phone trying to reach out to state lawmakers who voted in favor of Senate Bill 408, the law allowing Citizens to ask for the whopping rate increase.

He had little luck speaking to anyone to defend the astronomical rate increase.

"It hurts me being a leader of a community that you know is in trouble and you can't do anything," he said.

Governor Rick Scott strongly supported SB 408. Late Wednesday. He issued a statement saying in part "...This proposal is the unfortunate result of politicians playing politics for too long keeping rates artificially low."

Typically, rate increases in excess of 15 percent are subject to a series of public hearings. A spokeswoman for the Office of Insurance Regulation said the rate request has not been formally submitted.

However, those who oppose the suggested rates can contact the OIR at www.floir.com .