Well, the insurance companies did not get everything they wanted out of the new law and Bill 408 so they are working new angles. Citizens unanimously received approval to raise sinkhole coverage rates by as much as 2,000% in certain parts of Florida. Reports indicate that rates will increase by an average of 430% across the state, costing homeowners approximately $350 more a year from what they are paying now. Even beyond the sinkhole increase, Citizens is also receiving approval for a 8.8% hike for non-sinkhole coverages. Citizens claimed that the rate increase were necessary to cover the rising number of sinkhole claims in Florida. Senator Fasano believes that most private insurance carriers in Florida will soon seek the same increases. This was one of the main concerns with Bill 408, it decreases the coverage paid out and allows carriers to increase the premiums they charge. The only battle the carriers did not win was to make sinkhole insurance elective, meaning they still have to offer the coverage even if the price is outrageous. These rate increases are round about ways of doing away with sinkhole coverage altogether as soon homeowners will not be able to afford the endorsement and the carriers will get what they wanted in the end. They usually do after all.
Another issue that has been brought up is the fact that the rate increases will likely have a negative impact on the housing market as new purchasers will not be able to afford coverage in sinkhole prone areas. The problem is most banks and mortgage lenders require homeowners to have sinkhole insurance if they reside in certain regions. So homeowners are ultimately forced to buy the ridiculously high insurance just to get the house they want.