Most property insurance policies in Florida contain provisions providing for insurance coverage in the event of property damage caused by sinkhole activity. Florida, in addition to Tennessee, are the only states in the country that require insurance companies to offer sinkhole coverage - sinkhole coverage, in addition to any other type of ground movement, is expressly excluded by most insurance policies in the remaining 48 states!
Sinkhole Coverage Required By Law
Sinkhole coverage is mandated by Florida Statutes. That is, insurance companies are required by law to offer sinkhole insurance coverage to homeowners. Prior to 2007, every property insurance policy written in Florida contained sinkhole coverage. However, lobbyists representing insurance companies forced the Florida Legislature to change sinkhole laws during the 2007 Legislative session, which dramatically weakened consumer protections and potentially saved insurance companies millions of dollars annually.
Insurance Company Lobbyists
The 2007 changes permitted state-run Citizens Property Insurance Company to automatically exclude sinkhole coverage for homeowners in Pasco and Hernando counties, where much sinkhole activity is thought to occur, unless a Pasco or Hernando homeowner expressly demands sinkhole coverage. And after demanding coverage, Citizens would often charge the homeowner extra money, on top of the already expensive premiums, to add sinkhole coverage back to the homeowner's policy - sometimes thousands of dollars more! In all the other counties in Florida Citizens continued to automatically include sinkhole coverage in its policies - charging homeowners in these counties for sinkhole coverage - unless homeowners specifically requested to not have sinkhole coverage; these other counties were profitable for insurance companies due to the relative little sinkhole activity occurring there.
Insurance Profits By Limiting Homeowner Protections!
Give Citizens' success at increasing its profits and lowering its costs, insurance company lobbyists went back to the Legislature in the spring of 2009 and demanded that other insurance companies in Florida be allowed to automatically exclude Pasco and Hernando homeowners from sinkhole coverage, unless a homeowner demanded coverage and agreed to pay potentially thousands of dollars more to continue sinkhole coverage!
Sinkholes Occur In Florida
Sinkholes occur regularly throughout Florida, and sinkhole damage can be devastating to a home and to the homeowner. For most people, a home is a person's single largest investment - damage to that investment can be overwhelming and devastating. That's where insurance comes in - to provide protection in the event of an unexpected loss or disaster.
In Florida, some might speculate that the average homeowner is more likely to experience damage caused by sinkhole activity than they are to experience home damage caused by fire. No sane homeowner would ever agree to pay money for an insurance policy that excluded fire damage - what's the point of it? - yet insurance companies try desperately to exclude sinkhole coverage from their policies!
2010 Legislative Session
Chances are the insurance company lobbyists will be back at it again in 2010! Insurance company lobbyists would love nothing better than to further restrict and limit sinkhole insurance in Florida.
For information about sinkhole insurance in Florida, contact John Byrne of the Byrne Law Group at 813-413-6565 for more information. Or continue to check here for updates.