Angst over premiums fuels reform efforts

Article Courtesy of The St. Petersburg Times

Published  December 31, 2006

The year began with doubts Pasco County had much of a role fighting insurance rate hikes. It ended with county officials lining up an attorney, an actuary and potentially stiffer mandates to reduce risks on homes.

While Pasco County commissioners and lawmakers opened up to fighting for changes, property owners just opened nonrenewal notices and high premiums - and news that more big increases are coming.

Insurance dominated poli- tics in 2006 in Pasco, where rate increases have been among Florida's largest. Insurance angst sowed the seeds that produced a Pasco-based reform group, Homeowners Against Citizens later renamed to Having Affordable Coverage, and helped Michael Cox unseat County Commissioner Steve Simon.

HAC members even made a mini march up to Tallahassee, pressing legislators in the spring to make major reforms. Bills were tripling from a few years ago, and middle income homeowners felt the pinch. Coastal Pasco faced 139 percent hikes, and the rest of Pasco saw 76 percent increases by state-run Citizens Property Insurance Corp.

State Sen. Mike Fasano, R-New Port Richey, and Rep. John Legg, R-Port Richey, pushed into law tougher limits on what could be called sinkholes and how they are processed and repaired, hoping to curb the No. 1 cause for Pasco's high premiums.

Still, bills went up. Indeed, the major reform bill turned out to include a stunning hike in Citizens rates that Citizens leaders said they did not want.

As pressure built to act in the summer and fall, county commissioners went from passing resolutions to hiring for $100,000 insurance lawyer Timothy Volpe of Jacksonville and actuary Allan Schwartz of New Jersey. They voiced the case that Citizens, which has more policies in Pasco than any private company, should cut the rates here.

Imogene Arnold, a retiree, put it her own way: "How in the name of God do they think a senior citizen living on Social Security is going to come up with a $9,000 deductible?"

Citizens has offered to cut homeowners' bills 56 percent by making sinkhole coverage optional. Volpe and Schwartz say 56 percent is not enough.

By December, the County Commission - prodded by Cox - began exploring tighter requirements for inspecting for sinkholes and requiring a permit for any sinkhole-related repairs. Soil tests might be required for the foundation of every new home, although some builders blanched at costs related to exhaustive tests.

Commissioners also started to consider whether permits should be required for any sinkhole-addled home. Unlike window replacement or even major renovations, no permit is required for sinkhole repairs. Requiring permits would mean better tracking and required inspections - an afterthought today, beyond code inspectors digging their heels to loosely test soil at construction sites.

While officials said they were making progress, some things seemed strangely familiar by year's end. Lawmakers were gearing up to deal with insurance at a special session in January. HAC activists were organizing another bus tour to Tallahassee.

And rates still were going up.

One house, many dollars

Dean Olivanti of Land O'Lakes had to find a new home insurance carrier this fall after his previous one dropped him. But the idea of insuring his 2005 home in the Ballantrae subdivision, just off State Road 54 east of the Suncoast Parkway, brought quite different proposals from two private insurers and state-run Citizens Property Insurance Corp., according to quote sheets provided by Olivanti. The masonry home has not been near any sinkholes, he said. Olivanti, a licensed insurance agent, ended up with the lowest premium of the three - but not without fears of being dropped next year.

- Premium: $1,751

- Dwelling coverage: $300,000

- Hurricane deductible: 2 percent

- Sinkhole coverage? Yes


- Premium: $5,368

- Dwelling coverage: $295,000

- Hurricane deductible: 5 percent

- Sinkhole coverage? No


- Premium: $5,695

- Dwelling coverage: $336,500

- Hurricane deductible: 2 percent

- Sinkhole coverage? Yes