At least some Florida legislators are getting the message that they went too far when they allowed Citizens Property Insurance Corp. to raise premiums for sinkhole coverage through the roof. Several Tampa Bay lawmakers, including Pasco Reps. Will Weatherford and John Legg, are asking state insurance regulators to consider the impact that changes in the new law will have on reducing claims before approving ridiculous rate increases. That's a start, but the Legislature needs to go further and set reasonable caps on the premium increases.
Responding to questions from Chief Financial Officer Jeff Atwater at Tuesday's Cabinet meeting, state Insurance Commissioner Kevin McCarty said he will take into account changes to state law as he evaluates the untenable sinkhole premium increases requested by Citizens. It makes no sense to base the rate increases on past claims without considering changes such as limiting the damage that will be covered, requiring that repairs be made and narrowing the time frame for filing claims.
Even better, McCarty told the governor and Cabinet he could require that the rate increases be phased in over time instead of being forced upon homeowners in one year. Yet with such enormous increases, he may not have enough flexibility to spread the cost out long enough for many to stomach. For example, rates in Tampa would rise from $156 to $3,651 a year. Rates along the Hernando coast would jump from $1,356 to $5,734. There aren't enough decades left in this century to fairly spread those sorts of increases.
Sen. Mike Fasano, R-New Port Richey, voted against this bad bill and sounded the alarm all along about its disastrous impact. But it took Citizens to come out with its real numbers before some legislators who voted against the consumer felt buyer's remorse.
Tuesday's developments are steps in the right direction, but they aren't likely to go far enough to provide adequate relief for many homeowners who can't afford the premiums and can't drop sinkhole coverage because their mortgage company requires it. Ultimately, the Legislature is going to have to correct its mistake and establish a reasonable glide path for sinkhole rates to rise just as it has done for the rest of the Citizens' coverage.