TAMPA BAY, Florida - Insurance reforms passed by the state legislature this year are starting to take their toll on the Bay area.
Homeowners and insurance agents have been filling local legislators' inboxes with complaints about the new changes, including insurance companies' right to non-renew sinkhole coverage.
The sinkhole exception, which took effect on Oct. 1, is forcing consumers to pay close to $100 for a sinkhole inspection to continue coverage. But a number of e-mails, obtained by the 10 News Investigators, show independent insurance agents criticizing Citizens Property Insurance for refusing to offer sinkhole inspections on homes with no flaws other than "minor stucco cracks or driveway cracks due to settling."
Other agents have echoed the concern that Citizens is using the inspections as an excuse to deny coverage. One told the 10 News Investigators that poorly-trained insurance inspectors are simply taking photos of driveway or patio cracks and calling them possible sinkhole activity, even when thin concrete or growing grass is to blame. The agent asked 10 News to keep his identity secret for fear of retaliation from Citizens and the insurance lobby, which pushed the reforms in Senate Bill 408.
Another measure, set to take effect on Jan. 1, 2012, allows insurance companies to exclude outdoor structures from a policy, including carports, screened enclosures, and patios.
"To make matters worse," another insurance agent wrote in an e-mail to Sen. Mike Fasano, R-New Port Richey, "unless we manually do a new replacement cost estimation (RCE) the dwelling coverage will continue to include coverage for the enclosures they no longer cover. And if we do complete a new RCE, most likely the dwelling coverage will come out higher because Citizens implemented a new system last year which in most cases has higher valuations."
The frustrations of agents and homeowners alike matches the frustrations of the insurance industry in recent years as sinkhole claims have skyrocketed. Lobbyists for the industry contend small cracks from settling have allowed homeowners and lawyers to file thousands of unnecessary and sometimes fraudulent sinkhole claims. Many private insurance companies have stopped writing policies in sinkhole-prone areas.
Citizens Insurance asked for hikes in sinkhole rates of up to 2,000 percent in July, but later reduced their request to a more gradual approach. The Florida Office of Insurance Regulation rejected the proposal anyway, allowing Citizens to increase sinkhole rates by an average of just 36% this year.
"I am becoming increasingly alarmed at the reduction in (Citizens' coverages and) increasing premiums," wrote another independent insurance agent in an e-mail to Fasano. "First they decided to increase premiums on Sinkholes to astronomical rates particularly in your district. Then they decided to renew without sinkhole."
"Now," the email continued, "(Citizens) wants to remove screen enclosures and carports from any form of coverage without a buy back option. All this and you still get an increase in your premium cost. What's next? Why don't we have 'just pretend' coverage?"
Fasano spent the 2011 session fighting SB 408 to little avail.
"SB 408, that we fought against and Gov Scott signed into law, has created a mess for many," Fasano said. "And this is just the beginning."
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