Sinkhole plan 'done deal'

Two Pasco legislators look to trade optional sinkhole coverage

for lower insurance rates.

Article Courtesy of The St. Petersburg Times

Published  January 17, 2007

TALLAHASSEE - A proposal to make sinkhole coverage optional in return for a big cut in rates for homeowners insurance has been added to a proposed Florida Senate bill, making two Pasco County lawmakers optimistic it will become law.

"It's a done deal," state Sen. Mike Fasano, R-New Port Richey said Tuesday. He is pushing the plan with state Rep. John Legg, R-Port Richey.

The proposal limits mandatory coverage to catastrophic collapses that leave homes uninhabitable. More comprehensive coverage, now standard with most policies, would be available as an option with a deductible.

A draft house bill contains the Fasano-Legg proposal, but the original Senate version had different requirements. That caused officials in Pasco and Hernando county to worry last week that rate-increasing sinkhole claims would not be curbed enough. With leaders in both houses now backing the change, its chances seem strong of being passed during this week's special session.

Insurers blame sinkhole claims for driving up rates in Pasco, Hernando and northern Pinellas counties where most claims originate. Hundreds of claims come from residents of these areas, but few if any involve homes actually collapsing.

Pasco officials met with Lt. Gov. Jeff Kottkamp on Tuesday afternoon to seek support of the sinkhole option, among other items.

"I know your problems are unique when it comes to sinkholes," Kottkamp said.

Dropping sinkhole coverage for all but catastrophic claims could cut rates up to 58 percent in areas of western Pasco, according to a proposal by state-run Citizens Property Insurance Corp., Pasco's largest insurer.

However, some local officials and activists worry about a provision in the House bill but not the Senate's that says a house must collapse within seven days of a sinkhole opening to be covered under standard policies. For instance, what happens to a homeowner whose house collapses over eight or more days?

Ginny Stevans, president of Pasco-based Having Affordable Coverage, said the law should allow collapse coverage "if you have an uninhabitable house - period." But the group does agree with allowing customers to have more insurance options, she said.

The seven-day provision in the House bill is "a sticking point but it's not something that's going to kill the bill," said Legg, who said the seven-day limit made some lawmakers more comfortable about the standard.