Sinkhole Insurance Is Workshop Focus

Article Courtesy of The Tampa Tribune
Published August 16, 2007

Two consumer groups will host a Saturday workshop to discuss options for sinkhole insurance in Pasco and Hernando counties.

The session will feature panel discussions by homeowners and experts on sinkholes, insurance and legal issues. The workshop is from 9 a.m. to noon at Spartan Manor, 6121 Massachusetts Ave., New Port Richey.

The Florida Consumer Action Network and grass-roots group Having Affordable Coverage worry that homeowners don't understand all the ramifications of a pilot program to make standard sinkhole coverage optional.

Pasco and Hernando counties are extremely vulnerable to sinkholes because of topography. Last year in Pasco, geotechnical companies reported 855 confirmed sinkholes.

The change by state lawmakers means clients of the state-run Citizens Property Insurance in those counties no longer will automatically have standard sinkhole coverage. They will be guaranteed coverage in event of a "catastrophic ground cover collapse" that results in their property being condemned and their having to find somewhere else to live.

They will have to pay extra if they want protection against sinkhole damage that doesn't make the home uninhabitable.

Specialists say a catastrophic collapse is extremely rare and the average cost to repair a sinkhole-damaged home is $60,000 to $65,000.

Critics, however, point out that such an expense would devastate many households, and they ask whether saving money by going without standard coverage is worth the risk.

Proponents say the pilot plan provides immediate relief to the majority of residents who have no worries about sinkhole damage. If a homeowner chooses to reinstate full sinkhole coverage, the premium will return only to the level that it is now, supporters say.

Proponents also note that sinkhole fears have led to countless claims and big settlements with Citizens. That, in turn, has caused premiums to skyrocket.

Seating for the workshop is limited and reservations are necessary. Call (727) 967-8220 from 9 a.m. 5 p.m.