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Pasco, Hernando residents' sinkhole coverage outrage on display

NEW PORT RICHEY

Ellie Martin stood in front of the Pasco County Government Center Tuesday afternoon under a blazing sun and a sign with the words "Citizens Sinkhole Rate Increases" crossed out in a red circle.

The 80-year-old hadn't heard of sinkholes until she moved from New Jersey to the High Point neighborhood in Brooksville nearly two decades ago. But on Tuesday, she boarded a charter bus to join roughly 250 people on the side of Little Road in New Port Richey to protest massive rate hikes to sinkhole premiums sought by Citizens Property Insurance.

Martin and her husband have a different insurance carrier but worry that private companies will follow suit if Citizens is granted the increase.

"We live on a fixed income and I don't want to lose my house," Martin said. "You have to fight for what you believe in, even if it's in the heat."

The rally, organized by the consumer advocate coalition Policyholders of Florida, is a sign of the mounting outrage sparked by a unanimous vote by the Citizens board to request the increases, citing the skyrocketing cost of sinkhole claims.

If approved by the state's Office of Insurance Regulation, the rate increases mean the average premium for a sinkhole policy in coastal Pasco County would increase from $1,270 to $3,598. In coastal Hernando County, premiums would soar from $1,356 to $5,734.

About six hours before the rally, in a cramped conference room at the Holiday Inn Express in Brooksville, a Realtor, a mortgage broker, a former Hernando County Commissioner and two state legislators railed against the Citizens request and what they called the flawed insurance reform bill signed into law by Gov. Rick Scott in May.

The rate increases would wreak havoc on the economy, said David Welch, regional director for the Florida Association for Insurance Reform. The nonpartisan, nonprofit lobbying group known as FAIR is calling for solutions to the insurance crisis that won't overburden policyholders, Welch said.

"Our goal is to bring balanced reform," he said. "We don't want it to be a Republican or Democrat thing."

State Sen. Mike Fasano, who would later join the rally in Pasco, recalled his warning during the spring legislative session to fellow lawmakers about the likely consequences of Senate Bill 408, especially a provision that would remove the rate cap for optional sinkhole coverage. Citizens had been gradually increasing the rates by as much as 10 percent a year to cover the expense of sinkhole claims. Now the state-run insurer is seeking increases many times that.

Private companies will almost certainly come forward with similar requests, Fasano said. The Spring Hill Republican repeated his call for a special session to repeal the measure.

The Office of Insurance Regulation has until Sept. 19 to rule on Citizens' request. Fasano has called for public hearings, and one has been set for Sept. 13 in Tampa. If approved, the new rates would take effect in January, before the Legislature's next regular session.

"We need to go back and reverse a decision that was made by some of my colleagues now, not next year," Fasano said, his voice rising, his finger jabbing the air.

One of those colleagues who did vote for SB 408 sat a couple of feet away, waiting to speak. When it was his turn, state Rep. Rob Schenck, a Spring Hill Republican, said he was "blown away" by the Citizens rate request and theorized the move was a ploy.

"They just want to get out of the business (of sinkhole coverage)," Schenck said. "It's unacceptable."

Schenck, a Spring Hill resident since 1980, said that if the rates are approved, "We're committed to fix that legislatively."

Afterward, Schenck told the St. Petersburg Times that he doesn't support the law's repeal because it includes viable measures that will, if given time, reduce fraudulent sinkhole claims and bring down premiums. He would, however, support a measure to cap rate increases for sinkhole coverage.

The personal hits to pocketbooks will stymie the recovery of a region already hit hard by the busted housing bubble and ensuing recession, said Spring Hill Realtor Lawrence Sanek. Homeowners faced with impossibly high increases will flee the area, and potential buyers from near and far who might otherwise help relieve the housing inventory glut are getting scared away, Sanek said.

"I have international (buyers) telling me, 'Tell me about this sinkhole problem. How much is it going to cost me?' " he said.

The added burden of sinkhole premiums could be the breaking point for homeowners already struggling to make mortgage payments, said Steve Fingermen, branch manager for Allied Home Mortgage Corporation in Spring Hill.

"You either pay up or you walk away," Fingermen said. "Having people walk away is not going to help our community."

Back at the Pasco rally, Vivian Garner held a sign and fretted that more of her neighbors will find themselves in her position. The 55-year-old elementary school teacher who lives in a flood zone in Hudson already dropped Citizens coverage because she couldn't afford the $8,000 annual premium.

"This is what we've come to in the state of Florida? People can't afford their insurance?" Garner said. "It's ridiculous.

Tony Marrero can be reached at (352) 848-1431 or tmarrero@sptimes.com. Reach Jacqueline Baylon at (727) 869-6247 or jbaylon@sptimes.com.

.IF YOU GO

Public hearing

The state's Office of Insurance Regulation will hold a public hearing to consider and hear public testimony on the requested Citizens rate increase at 4 p.m. Sept. 13 in Ballroom D of the Tampa Convention Center, 333 S Franklin St. Consumers can also send comments by e-mail to ratehearings@floir.com. Be sure to type "Citizens" in the subject line.

Pasco, Hernando residents' sinkhole coverage outrage on display 08/16/11 [Last modified: Tuesday, August 16, 2011 10:58pm]

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