SPRING HILL — Lee Crowe still remembers the phone call from last August
He was talking sinkhole damage with an insurance adjuster. Workers had already pumped $84,000 worth of grout under his Timber Pines home. Now he needed an estimate of cosmetic damage caused by the sinkhole and the subsequent repair.
Talk turned to cost. The adjuster said: Do you know you have a $20,600 deductible?
Crowe was stunned.
"What?" he said. "Nobody's ever told me that."
His out-of-pocket deductible had always been $2,500. Now the 74-year-old retired firefighter from Delaware was being asked to cough up eight times that amount.
The cost of the repairs: $23,000.
He's not alone. Many Florida homeowners with sinkhole coverage through Citizens Property Insurance could soon be in for the same sticker shock.
Crowe's deductible soared under a little-noticed change that took effect in 2012. Homeowners with sinkhole coverage are now required to pay 10 percent of their home's insured value before Citizens pays for any repairs. Earlier policies offered the 10 percent deductible as just one option to reduce premiums.
Citizens spokeswoman Christine Ashburn said the change took effect last May for new policyholders and a month later for renewals. In an email, she said agents were notified of the change last March. She said customers were notified before their renewal and could opt to remove sinkhole coverage.
Ashburn said the change is part of an ongoing effort to reduce the company's "exposure" to sinkhole claims. State officials say sinkhole claims jumped to nearly 6,700 in 2010 up from 2,300 in 2006. Hernando and Pasco lead the state in claims, earning the nickname "sinkhole alley."
In 2011, state-run Citizens collected $51 million in sinkhole premiums, but it paid out $136 million to cover sinkhole claims. Over the past several months, the insurer has aggressively tried to shrink its customer base and encourage homeowners to buy coverage from private firms.
State Rep. Mike Fasano, an ardent Citizens critic, calls the higher deductible a "ploy" to raise premiums "through the back door without coming to the Legislature."
"Take a senior citizen," said Fasano, R-New Port Richey. "There's no way many of them could come up with $20,000. There's no way a working family can come up with that kind of money."
Fasano said he is exploring legislation to either stop the higher deductible or give homeowners a lower option.
Many people are just starting to find out about their new deductible as new policies take effect and homeowners begin filing claims.
"It's going to create a major problem," said Taylor Yarkosky, owner of Advanced Pier Technology, a sinkhole repair company. "Your average working person between 30 and 50 years old probably doesn't pay attention (to their policy's details). They're not going to notice until a catastrophe happens that they go, 'What do you mean I've got to pay 10 percent?' "
Ron Woods of Hudson considers himself lucky. He noticed a 2-foot-wide sinkhole forming outside his Beacon Woods home last summer, six months before his new policy takes effect in February.
His new deductible will soar from $2,500 to $28,500. That's on top of a 14 percent increase in sinkhole premiums.
"The sinkhole coverage went up even through the deductible skyrocketed," he said.
The 10 percent figure might not sound like much, but it can get expensive quickly. The figure is based on the home's insured value, not the cost of repairs. And in many cases, the insured value is much higher than the market value. (For example, the Pasco property appraiser values Woods' home at $125,000, less than half of the insured value.)
"I had a homeowner that had to write us a check for $44,000 out of their own pocket," said Karen Hecksher, of Hayward Baker Inc., another sinkhole repair firm. "They were fortunate in that they had the funds, but golly. You don't want to see people in this situation."
Crowe, the homeowner in Spring Hill, is fixing the cosmetic damage by himself. He replaced cracked tiles with laminate flooring. He installed a new wood ceiling.
But his home has plenty of examples of minor damage. A large mirror in the living room has a wide crack in it. Several doors don't close properly. The new floor is buckling in some places.
Crowe said he is most upset by how Citizens rolled out the higher deductible. He called the move "sneaky" and said he never received a letter explaining the change when he renewed his policy.
"I figured, it's the same policy," he said. "What they're doing to me is almost counting on somebody's irresponsibility as far as not reading fine print. We have all been programmed to not even read all that stuff."
Crowe isn't the type of person who gets mad very often. He tries to keep an even keel.
"But this, there's an injustice that been done to a lot of people," he said.
Lee Logan can be reached at firstname.lastname@example.org or (727) 869-6236.