More than a hundred furious protestors shouted and waved signs outside Pasco County government offices yesterday. They rallied to protest massive rate hikes proposed for sinkhole insurance coverage.
Last year there were far more sinkhole rate claims in the Tampa Bay area than in previous years. While many say the drought is to blame, some politicians in Tallahassee think fraud is at work. So State Senate Bill 408 was written to address the fraud, but also did away with a 10% annual rate hike cap that protected insurance customers. So now the government-backed Citizens Property Insurance Corporation plans to raise sinkhole premiums by 400 to 2000 per cent. Republican State Senator Mike Fasano was on the front lines of the protest.
Early in 2010 the Tampa Bay area faced not only drought, but a cold front that lasted over a week. During the freeze farmers pumped nearly a billion gallons of water to keep crops warm, but caused scores of sinkholes to appear. A survey by the Office of Insurance Regulation shows that sinkhole claims grew from about 2,000 in 2006 to 6,000 in 2010. Fasano said that Citizens reacted to the spike with an unusually high increase in premiums.
Norma Facito is one homeowner who could face foreclosure under the new law.
Citizens said they paid out more than one billion dollars over the last nine years, while collecting only 300 million in premiums. Citizens asserts that many homeowners were just cashing in on fraudulent claims to get a profit. But Fasano said they have no proof of fraud.
Dominic Sinopoli is with NEC Keystone, a company that fixes about 150 houses with sinkhole issues every year. He said that Citizens would save money if it funded sinkhole repair directly.
Fasano suggests that Citizens should wait and see if anti-fraud provisions in the new law work effectively before raising their rates. He thinks Citizens may be in the hole due to their carelessness in covering claims.
Citizens was created as a government-backed insurer of last resort for people like Jean Schiaccaitano. She could spend thousands each year on sinkhole coverage alone if the law is upheld.
Protesters came from nearby counties and represented a wide range of political backgrounds. Sean Shaw is an insurance consumer advocate with Policyholders of Florida, and helped organize what he called a diverse rally.
There will be a hearing on the proposed Citizens rate increase at the Tampa Convention Center September 13 at 1:00 p.m.
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