Potential changes to sinkhole insurance coverage
Our ears are abuzz with rumors the insurance industry is making plans for an active season of lobbying our legislature, either to limit or even extinguish sinkhole coverage for property owners.
I understand recently, as many as a dozen representatives from insurance companies met at a local restaurant to share ideas, fears, or just vent about the payments they must make under their insurance policies.
While I can understand, given the financial affairs of much smaller, poorly run insurance companies, I also see this as a threat to the interest of homeowners, mortgage companies, and others who are interested in protecting the value of Florida real estate.
What to prepare for
Homeowners should be prepared for a variety of new attempts to limit their insurance coverage, without making any reduction in premiums you pay. While many insurance companies worked with the Florida legislature on bills to automatically delete sinkhole coverage in Hernando and Pasco counties, most of the people in those communities are now experiencing skyrocketing premiums, with increases as much as 30, 40, and 50 percent over the previous year.
If, as they claim, sinkhole losses were the problem, I query how they could justify both the loss of important coverage like sinkholes, while at the same time increasing premiums. Note, the trick that was pulled 2 years ago was that they deleted sinkhole coverage in these two counties, and only added it back if you asked.
Furthermore, if you didn’t ask, they make you pay for a sinkhole investigation to determine if sinkhole activity is present. They only did this because most people who actually read the alternative insurance coverage (catastrophic insurance coverage) figured out it provides no value anyway.
Gear up for a battle
Bottom line, is that homeowners are likely to have a battle next year over protecting their homes, and need to help the legislators who are looking out for their interests and not the insurance lobby.