We call it the “S” word -- like SINKHOLE!

Letter to Editor

By Ginny Stevans, President of HAC (Having Affordable Coverage)
Published  April 19, 2007

We call it the “S” word in our group. Bring up the Sinkhole issue to your lawmakers and “at best” the conversation ends there and at worst you will have a fight on your hands. They don’t always want to answer your questions. We are asking questions and lots of them. We have had to dig hard to gather information we feel is important for the “people” to know. So first I will start by giving you the actual language from the Special Session concerning sinkholes.

Every insurer authorized to transact property insurance in this state shall provide coverage for a catastrophic ground cover collapse and shall make available, for an appropriate additional premium, coverage for insurable sinkhole losses on any structure, including contents of personal property contained therein, to the extent provided in the form to which the sinkhole coverage attaches. A policy for residential property insurance may include a deductible amount applicable to sinkhole losses equal to 1 percent, 2 percent, 5 percent, or 10 percent of the policy dwelling limits, with appropriate premium discounts offered with each deductible amount.

Last week HAC met with Florida’s Chief Financial Officer, Alex Sink’s Consumer Advocate, General Bob Milligan. He voiced his concerns about having “Optional Sinkhole Coverage” He felt the Citizens of Florida need to be made aware of the pitfalls of not being covered for sinkholes as well as being under insured and having too large of a deductible. The reason General Milligan says we are unable to get much information on the sinkhole legislation is it is still being worded and the final results are not due out until presumably the first of September. There are still issues concerning the legislation including… whether it should be written as an “OPT-OUT” or an “OPT-IN” The difference is this: If it is worded as an “OPT-IN”, then those who choose to keep coverage or have mortgages that require you to keep coverage the cost to buy sinkhole coverage will be very high. According to General Milligan, it would be common sense that if you have to “buy”, or “OPT-IN’, for coverage and there are less people in the risk pool so costs for coverage will be high. However if it is written as an “OPT-OUT” then you will receive a discount to drop the coverage verses being punished in having to “BUY-IN” for coverage. He suggests that everyone call, write, or e-mail your elected officials and voice the need for an “OPT-OUT” policy. Even the Times reported that Insurance Commissioner Kevin McCarty told them in December he preferred that customers be given the chance to opt out, because of the risks to people who are not well informed. Homeowners need to be cognizant that reduced rates come with the assumption of greater risk

Another problem we have faced in speaking to some elected officials is the fact that they have informed people that the benefit of dropping sinkhole coverage is it will lower your “bill” between 50% and 60%. In an e-mail I received from Carrie Vaught-Henriquez, Legislative Coordinator, with the Office of Insurance Regulation she, states “Sinkhole coverage and the risks related to sinkholes are not factored into the wind portion of the

Premium; therefore the opting out of sinkhole coverage will only decrease the “all other perils” portion of your premium” This means only the portion of your bill that does not cover wind (hurricane) or Flood.

We have been told by some elected officials that the “major” banks have agreed to allow the opting out of sinkhole coverage but be warned that not all banks will allow this, especially local banks that are aware that we live in a sinkhole prone area. It is a shame that they fought so hard to take away sinkhole coverage from the people to lower premiums and did not focus more on taking the lawyers and fraud out of sinkholes.

We at HAC have been chastised for not taking a position on the Optional Sinkhole Coverage. We will not take a position since we do not have full disclosure of all the ramifications that may happen. On two separate occasions, with two different legislators, I was ‘yelled at’ by both of them and called a media hog by one of them. All of this was in an effort to seek more information.

HAC will not take a sinkhole coverage position until we see the final product. We feel that backing it before all the facts are in could be disastrous and similar to last year’s Legislation of SB1980 that was voted on without knowing all the terrible consequences. Later it required calling a Special Session at great cost to the taxpayers to repeal this terrible bill.

As far as being “media hogs”, HAC tries to provide the best information to the people so they are informed. No one person on the board has any hidden agenda, nor is paid any money; it is all volunteer work from concerned Citizens. Occasionally we are not 100% correct in our reporting and this is due to the fact that by the time we get the information it has already been changed. It is the responsibility of our elected officials to give us the correct information rather than argue, yell, or bash us for not knowing. I think that they sometimes forget that THEY work for US and WE pay their salaries. They should not be allowed to tell any consumer they will not discuss ANY issue concerning the State of Florida. We elected them and we can un-elect them in the future if they do not do their jobs and work “for the people”.

In closing I would encourage each and every citizen to “get involved”. Don’t be afraid to ask question and dig for the truth. We at HAC applaud the efforts of our Governor this week in Washington on his efforts for a National Catastrophic Disaster Fund and his continued efforts in seeking more rate relief for the people of Florida. We also are thankful for all the work going on in Tallahassee and Senator Fasano’s information to us on the House Glitch Bill which would have un-done good legislation passed in Special Session. We also ask for everyone’s support in getting HB1267 passed through its next committee. This bill is very consumer friendly and will help eliminate “pup” companies, keep the rate freeze for another year, and expand Citizens to help create competition in the industry. We at HAC are a non-partisan group and may back an elected official on one thing and oppose them on another; we will only back things that will mean rate relief without back-door openings for the insurance industry, or hidden agendas for politicians.

Ginny Stevans, President

HAC (Having Affordable Coverage)

Virginia Stevans
9530 Lakeview Drive
New Port Richey, Florida 34654
vstevans@tampabay. rr.com