sinkhole policy

Citizens to reinstate sinkhole coverage for some Florida homes

Tuesday, April 2, 2013

The largest home insurance carrier doing business in the state, Florida Citizens Property Insurance Corp., is looking reinstate sinkhole coverage for homeowners.  Most sinkhole coverages were dropped due to state legislation over the past couple of years.  Did your sinkhole coverage get dropped this past year?

Citizens board of directors has approved the changes that would let there be coverage for a variety of risks.  Some of these acceptable risks would include coverage sinkholes for new house contraction.  If you have either a mobile home or are building a new house, you might be-able to obtain sinkhole coverage.   Do you know if your policy currently covers sinkholes?  

A few years back, the legislature in Florida approved a new law called SB 408.  This was a bill that aimed to reduce exposure for the largest insurer in the state, Citizens, but left many homeowners uneasy, as they didn't have full coverage, i.e. sinkholes.  Citizens is the last resort for most homeowners in the state, but they are a necessity, with many of the private insurance companies only wanting to insure quality risks.  

These new changes will still have to be approved by FLOIR.  It will be interesting to see what they have to say on the subject of sinkholes.  What are your thoughts? Are they a major problem in Florida?

by Morgan Moran

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Florida Sinkhole Problems

Ponte Vedra Beach, Florida homeowners insurance customers, along with most Floridians, are trying to get  insurance reimbursements for the massive sinkhole problems.  Many state lawmakers are considering measures to punish fake claims and try to ensure that home insurance policy proceeds are used to repair properties that really need the work. 

Many local and state authorities are increasingly concerned that a huge portion of the house owners pursuing sinkhole claims are using the insurance payments to pay off mortgages, rather than make fix their homes. In addition, local authorities say, some homeowners are getting their home appraised at a lower value due to the unrepaired damage, damaging all of the neighborhood prices and tax bases.

Florida sinkhole claims are on the rise and have truly increased dramatically since the early 2000′s. Most worry that this will  lead to huge rate increases for homeowners broadly and could weaken some of the smaller insurance companies that we need in the state. 

Statistics show that the average closed sinkhole claim in Florida exceeds $135,000, according to a November report by insurance regulators in Florida. Data compiled by regulators and county tax authorities indicate less than half the $1.3 billion paid out by insurance companies over the past four years has been used to plug sinkholes or shore up foundations.  The Florida sinkhole problems continue.  Please give us your feedback on this situation.

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