Florida Sink Hole Attorney Blog

Florida homeowners and people owning vacation homes in the Sunshine State may have questions about the types of homeowners insurance available. Since Florida is prone to hurricanes, tornadoes and floods, the types of insurance and what is covered under the policies, is different from the rest of the country.

Expect to Pay More

Since houses in Florida are routinely subject to adverse weather conditions that can cause heavy damage, Florida homeowners insurance policies are more expensive than the rest of the country.

One of the drawbacks to living in Florida is the marshy ground that makes it difficult to ensure that a given piece of land is stable enough to support a building. Sinkhole damage claims to insurance companies have increased in recent years and insurers argue that the staggering number of claims necessitates a drastic rate increase. However, many consumers are outraged by the dramatic rise in premiums.

Citizens Property Insurance Corporation, a state-created insurance company, reported that it paid out $84 million in sinkhole claims and collected only $19 million in premium payments in 2009. The situation worsened for the company in 2010: it paid $245 million in sinkhole claims and received $32 million in premium payments. In an effort to try to recoup some of the money the company has hemorrhaged in recent years, the board proposed a radical premium increase that would raise rates an average of 429 percent state-wide. Some policyholders in areas known to have sinkhole problems like Tampa Bay could see rates skyrocket by as much as 2,000 percent.

By law, Citizens cannot raise their rates by more than 10 percent per year. However, the state legislature recently passed Senate Bill 408, which excludes sinkhole coverage from the rate increase restriction. The new law also contained other provisions that make it more difficult for property owners to collect on sinkhole claims, including a more narrow definition of what a "structural loss" from sinkhole damage is and a two year time limit on filing a sinkhole damage claim. Furthermore, if an insurance company denies a sinkhole damage claim on the grounds that there is not a sinkhole, the policyholder now has to pay up to half the cost, up to $2,500, for sinkhole testing.

The summer of 2011 was marked by a tragic car accident in Tampa. At a Columbus Drive intersection close to Interstate Four, a Toyota Solara carrying five young passengers was struck broadside by a Mazda CX-9 SUV.

Details of the Columbus Drive Wreck

Eighteen-year-old Alicia Shaheed was killed; three other passengers in the Toyota, aged 17 to 20, were rushed to Tampa General Hospital with serious injuries. The Toyota's driver, 20-year-old Chaz Yount, was unharmed. However, as Yount was driving with a learner's permit, Florida law required him to have a licensed driver over the age of 21 in the front passenger seat - at the time of the accident, the front passenger was 17 years old.

The Mazda's driver was 19-year-old Randolph De Sylvia. De Sylvia did not have a driver's license, and earlier in the summer faced misdemeanor charges for operating a motor vehicle without a valid license. De Sylvia only suffered minor injuries in the crash.

On May 17, 2011, the Florida Legislature passed S.B. 408, which severely limited a policyholder's ability to pursue a claim against their insurance company for sinkhole related damages.  These legislators touted to the public that, in return for signing such an onerous bill into law, the insurance companies would pass along the savings garnered by these new draconian restrictions on sinkhole claims.

Guess what?  They were wrong.  In the classic example of having your cake and eating it too, the insurance companies have now sought greatly inflated insurance premium increases.  Such actions clearly fly in the face of their claims to be acting in the best interests of the policyholders.  Since the new law will greatly decrease the amount of claims which will be paid by the carriers, why are these savings not passed on?  If we didn't know better, it might just appear that the insurance companies were only interested in profits.....

Below is a link to a great article published in the St. Pete Times which calls out this hypocrisy.  We just hope that enough of the Legislators in Tallahassee get the message.

 http://www.tampabay.com/opinion/columns/insurance-industrys-sinkhole-hypocrisy-will-hurt-floridas-economy/1200239

As always, we will continue to vigorously pursue sinkhole claims on behalf of policy holders - regardless of any roadblocks created by the insurance companies.