Florida legislators should not give state-run Citizens Property Insurance Corp. the ability to further dictate to homeowners who will repair their sinkhole damage and how it will be done. Previous reforms have already had a big impact in reducing sinkhole claims, and this legislation is unnecessary and transfers too many decisions from the homeowner to the insurer.
Legislation approved by the House, HB 129, would have Citizens compile its own list of sinkhole repair contractors and force its customers to choose from the approved vendors for underground stabilization work. The Senate sponsor, Sen. Wilton Simpson, R-Trilby, says the changes would encourage owners to repair damaged homes — instead of just cashing a settlement check — and help boost the lost property values attributed to sinkholes. In Hernando County, for instance, nonrepaired sinkhole homes are assessed at 50 percent of their value, which reduced the 2012 tax roll by $80 million.
Reversing that trend is a worthy goal, and Simpson is correct when he says "nobody has trust or confidence in Citizens.'' A history of higher premiums, reduced coverage, a two-year legal defense tab of $100 million, and pushing consumers into private coverage does not boost consumer confidence in the company's operations. While the company promises a kinder, gentler Citizens when dealing with customers, this bill would pave the way for select construction companies to gain an upper hand in fighting for a share of a shrinking market for sinkhole repair work.
That isn't the only way the legislation is aimed at limiting homeowners' choices. It will encourage Citizens' preferred method of "grout in the ground,'' injecting pressurized concrete beneath a home, instead of what many homeowners prefer and consider a more reliable approach — underpinning the structure with steel piers. Citizens traditionally resists underpinning, even though it can be less expensive, arguing the beams alone do not stabilize the subterranean soil.
Just three years ago, the Legislature changed the law to redefine sinkhole structural damage. It added other reforms aimed at curbing the suspected fraud blamed for Citizens' ballooning sinkhole claims that totaled $1.4 billion over a five-year period. According to more recent numbers, the reform is working. Sinkhole claims to Citizens dropped in half in 2012 and were down an estimated 80 percent between 2011-13. Simpson's bill is not retroactive, so the claims now in litigation won't be affected and the future pool of disputed cases should decline dramatically, just as the number of sinkhole claims did over the past two years.
Additional state intervention just isn't needed right now, particularly when Citizens already has a voluntary version of this repair program available to its customers. If consumer protection is truly the aim, as advocates contend, then the Legislature should establish separate licensing requirements for sinkhole repair work. That way all bona fide contractors, not just a favored few, can receive state certification and be available to repair sinkholes for customers of Citizens and all other insurers.