By James Call
http://stream.publicbroadcasting.net/production/mp3/wfsu/local-wfsu-958957.mp3
Tallahassee, FL – A bill on a fast track in the Florida Legislature would sharply curtail sinkhole coverage. James Call reports the proposal passed the Senate Budget Committee Tuesday but not before it was amended by a key critic.
Senate Bill 408 makes sweeping changes to Florida property insurance regulations. It is drawing opposition for redefining sinkhole coverage and eliminating claims for damage caused by the ground shifting but not actually opening up a hole. Sponsor Garret Richter says the intent of the multi-component bill is to keep the insurance industry solvent. It changes the time period to file claims and requires companies to have more cash in reserve.
"Fifteen million dollars versus four million dollars, higher levels of capital surplus, reduced statue of limitation on claims, actual cash values, replacement of cash values, so you take a step manner before you pay out the shall and the may on sinkholes, these are all a series of components that woven together will help solidify and make more solvent the insurance industry in Florida."
The Insurance industry is supporting the proposal.It says it is the victim of scam artists who have created an epidemic of sinkhole fraud. State records show insurers have paid about a billion dollars for damages related to sinkholes since 2006. However in the same period they paid out 13.5 million dollars to policyholders whose homes were a total loss. The first figure, the billion dollars, is where the fraud occurs. According to Sam Miller of the Florida Insurance Council, most of that money went to claims for what amounted to cosmetic damage.
"And yet because of the way the law is currently set up very effective public adjusters and sinkhole law firms and if you want to know who they are drive up and down Route 19 and look at the billboards can get policy limits for a crack in your driveway a crack in the wall so the bill among other things establish a new definition of structural losses from a sinkhole."
Sinkholes are more than a crater opening up and swallowing a house. Insurers are also required to cover damage created by subsidence; a shifting or re-settling of the ground. Both events cause damage and are expensive to fix. Bill Skyrynsky of New Porty Richey says his home was wrecked when the ground underneath began to shift. His insurance company sent 10 trucks to pour concrete in an attempt to stabilize the ground. Under Richter's bill Skyrynsky would not have had any insurance coverage.
"If fraud is truly the issue here go after the people committing fraud. Not honest Floridians. To fix this problem legislators have to stop listening to big insurance companies campaign accounts and start listening to real people."
Pasco County Senator Mike Fasano is opposing the bill and stood with Skyrynsky at a news conference.
"It is a sad day when I have to tell you that what we see before us coming before us in the legislature in the Florida House and the Florida Senate are some of the most anti consumer legislation every filed in my 17 years as a legislator."
Tuesday, Fasano guided an amendment through a committee that would required insurers to pay the replacement cost for damaged property whether the repairs are made or not. Afterward, Richter said his proposal is a work in progress and compared insurance reform to trying to change a tire on a moving car.
"It is my impression that when this bill goes through rules, which it will, when it is heard on the floor I imagine there will be continual debate on the floor. I am certain that Senator Fasano will file floor amendments and we'll continue the discussion."
The bill's next committee stop is Rules and then it goes to the Senate Floor.