Sinkhole damage insurance could be easier to get and more affordable under a plan that has growing momentum in the Florida Legislature.
But state regulators worry there are not enough protections in the bill to assure consumers are getting a fair deal.
Insurance carriers would be able to offer new limited sinkhole damage policies that cover the cost of stabilizing buildings and repairing foundations, but not necessarily have to cover all of the contents in a home or even stabilize the surrounding land. Legislators say the hope is that by giving the industry a less costly option, more carriers would write policies, even in hard hit counties like Pasco, Hernando and Citrus.
For years, private carriers have steered away from offering sinkhole coverage, or charged so much that it was prohibitive for many homeowners, particularly in what has been called “sinkhole alley.”
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“This will provide a market for insurance companies that want to insure for things less than the total structural collapses,” which are covered under standard homeowners policies, Sen. Jack Latvala, R-Clearwater, said just before his proposal unanimously passed its final committee stop Monday. It now heads to the full Senate.
A similar bill in the House has already cleared three committees and is waiting to be scheduled for a floor debate in that chamber.
State Rep. Blaise Ingoglia, R-Spring Hill, said it is a free-market approach to spurring the industry. He said there are no requirements to make homeowners buy the new policies. And there is no mandate forcing companies to offer it.
“We believe over time these solutions will fill a gap in the market,” Ingoglia told the House Insurance and Banking subcommittee last month.
But insurance regulators say they are worried that the legislation includes language that exempts the new policies from being filed with the Office of Insurance Regulation.
“We are not able to review the rates and deem if they are inappropriate or not,” Caitlin Murray, director of government affairs for OIR, said during a House Banking committee meeting last month. Murray repeated similar concerns about Latvala’s bill just before the Senate’s Fiscal Policy committee approved the measure Monday.