How will State Farm’s departure from Florida creates pressure on Florida sinkhole insurance showdown?
Charlie Crist opened the door wide open for State Farm to leave the state of Florida, telling State Farm in response to their announcement, “Good riddance.” Governor Crist is not an especially easy politician to follow, having also commented that the proposed Obama healthcare plan was “cockamamie.” (Cockamamie: something ridiculous or implausible). While these words may provide an outlet for the State of Florida in its dealings with these larger, broader based issues, homeowners may be facing dramatic changes in their Florida sinkhole insurance coverage before this dispute with State Farm is over. (What is a sinkhole?)
I’m unsure exactly how many policies State Farm currently provides in Florida, but they are unquestionably the largest private insurer. I use the word “private” because Citizens Property Insurance Corporation may have more policies, but they are actually an extension of the State and people of Florida. Whereas other, private insurance companies are ultimately supported by the investments and value of the company itself, the people of the State of Florida own Citizens. And while Governor Crist is out lamenting “cockamamie” plans and telling large private insurers “good riddance,” there is no active solution being proposed to resolve the skyrocketing premiums and the instability in the insurance market.
Regardless of whether people in Florida like State Farm or not, the real question remains simple: If the market in Florida – a state facing perils greater than the average bear, like hurricanes and sinkhole damage – is so unstable that we cannot support a large company like State Farm that provides Florida homeowners with sinkhole insurance coverage, then what? Counties with the highest frequency of Florida sinkhole insurance claims – such as Hernando, Pasco, and Pinellas – are finding added pressure to remove their sinkhole coverage entirely. This is unwise and leaves the problem at the threshold of the Florida homeowner.
Have a burning question you’d like to ask about sinkholes? Let us know.