What is Bill 1447
Bill 1447 is an insurance-backed bill designed to completely gut sinkhole insurance. While couched as a bill designed to reduce consumer insurance fraud, its contents are focused, among other things, in essentially ridding itself of sinkhole coverage for Florida homeowners, regardless of how much they want it.
The details: coverage
First, the bill does not expressly eliminate sinkhole coverage in property insurance policies. If it did that, the insurance company would be precluded from taking premiums for it. Instead, the bill seeks to limit coverage to twenty-five percent of the total coverage available.
Meaning, if your insurance coverage is $200,000, you would not be covered or more than $50,000 for the loss, regardless of how severe it may be. This renders sinkhole insurance coverage meaningless because virtually all confirmed sinkholes cost considerably more than this amount to repair.
Obviously, the larger the home (and the coverage), the more expensive the repair is. Even the most modest home with sinkhole coverage would not be able to be repaired for such a modest amount of the coverage.
Our insurance rights
Second, as we hear so much about keeping government out of our personal business, the bill patently interferes with our rights to buy and sell insurance. If an insurance company wants to sell insurance to me, for a premium, and I want to pay it, I should be entitled to do it. The insurance company sets their rates based upon their risks and accepts responsibility for it.
What right does the State of Florida have to preclude me from buying the insurance I believe is necessary to protect my home, which is my family’s largest investment?
The argument
Of course, the argument will be that Citizens Property Insurance Corporation, the “insurer of last resort” needs the break from covering sinkhole losses. If that is the reason for this bill, then Representative Bryan Nelson (who is an insurance agent) should be honest about the bill and call it what it is: an attempt to get rid of sinkhole coverage.
However, doing that would require him to make an honest statement about his intentions, where consumers could be misled into believing that twenty-five percent of the coverage would ever cover a sinkhole loss because it just would not.
Question for Representative Nelson: How many reported sinkhole losses would be fixable with less than twenty-five percent of the coverage? Answer: none.
Shame on you, Representative Nelson. House Bill 1447 is a rip off.
