Lawmakers in Florida are now focusing their attention on an increasingly expensive problem of questionable sinkhole claims that is driving up insurance premiums for homeowners in the state.
The Senate Banking and Insurance Committee heard testimony this week yet took no immediate action on a bill (SB 408) similar to one passed and vetoed last year. The bill's goal is make homeowners' policies more affordable by creating a more competitive private insurance market.
"What I'm trying to do is let the marketplace work," said Sen. Garrett Richter, a Naples Republican who chairs the committee. "Consumers will chose the product and company that they want."
Richter successfully steered through a comprehensive property insurance bill (SB 2044) last year that was supported by Insurance Commissioner Kevin McCarty.
Former Gov. Charlie Crist said he vetoed the bill because it was not consumer-friendly enough.
The committee resuscitated the measure that Richter said would reduce regulatory pressure on insurance companies and create more competition -- a factor he hopes will stabilize rates for consumers.
"We have to address cost drivers to protect consumers from being overcharged and insurance companies from going under," Richter said after the meeting.
Since the last major hurricane hit Florida in 2005, sinkhole claims have skyrocketed, totaling nearly $2 billion in the last four years. Most of the claims have come from Hernando, Hillsborough and Pasco counties. Sinkhole claims cost policyholders across the state an average of $120 last year. They've tripled in the last three years with two-thirds coming from the three-county region in west-central Florida. There were 7,245 such claims in 2009.
Former Gov. Jeb Bush vetoed a bill in June 2006 designed to increase the availability and cut the cost of sinkhole coverage because it duplicated provisions in a broader property insurance law he signed.
Sen. Mike Fasano, a New Port Richey Republican whose district includes Hernando and Pasco counties, and Sen. Eleanor Sobel, D-Hollywood, challenged several late-filed amendments they said were too favorable to the insurance industry. Fasano said loosening the reins on insurers would give them freedom to refuse to provide sinkhole coverage.
One amendment approved by the panel would let insurers send nonrenewal notices 90 days before a policy expires instead of 100 days in most cases now and as many as 180 days for long-term customers.
The committee adjourned before completing work on the bill, but plans to take it up again in two weeks.