More lawmakers join the call for closer look at Citizens sinkhole insurance rates
Sen. Charlie Dean and Representatives Will Weatherford and John Legg are joining Sen. Mike Fasano in the call for a closer look at the massive increases to sinkhole insurance rates proposed by Citizens Property Insurance.
The state-run property insurer has proposed raising rates for the policies by an average of 429 percent statewide, and more than 2,000 percent in some parts of the state. Company officials say the increases are necessary because fraudulent and frivolous sinkhole claims are draining their coffers, and premiums aren't high enough to cover losses. Officials at Citizens say in 2010 the company collected $32 million in sinkhole insurance premiums but had $245 million in claim-related losses. The Citizens board approved the rates this week. They now go to the Office of Insurance Regulation, which will schedule rate hearings in Tallahassee.
But some lawmakers say hearings should be held in other parts of the state. They also say the legislation, SB408, that gives Citizens permission to raise sinkhole premiums beyond a 10 percent cap that applies to other types of insurance should help cut down on the fraud that prompted the rate hikes.
"The rates they’re putting out there are based on past history. Don’t you want to wait a little while to see if what the Legislature did works?” said Weatherford, the House speaker-designate. "We gave them some flexibility. I don’t think anybody in the Legislature did this to give them carte blanche to jack up the rates as high as they can."
Similarly, Dean tweeted this on Thursday: "SB 408 was passed to cut down on the increased number of fraudulent sinkhole claims- not so Citizens could seek a 2,000 percent rate increase." He called for rate hearings in the areas "most affected by the possible increase."
Legg also called for local hearings, and said the Office of Insurance Regulation should exercise caution before approving the rates.
"They need to give it a little bit of time to get some data. How much time they need, I don't know. Is it six months? Nine months? I don't know," Legg said. "But it's very premature, 30 days after the law goes into effect, to do these rate increases when we don't know what the effect of the law will be. We're hopeful the anitfraud mechanisms we put in that bill will suppress the number of fraud claims and the rate adjustment won't need to be anywhere near what it is."
Among other things, the bill aims to cut down on fraud by requiring homeowners to spend any sinkhole damage awards to make repairs, and limits coverage to primary structures, excluding decks, driveways and sidewalks.