New Port Richey, Florida — Protesters lined the streets in New Port Richey, targeting a new law that would allow insurance companies to raise their rates for sinkhole coverage by thousands of dollars a year in some cases.
Even if you don’t own property, they warn this will affect you too by crippling Florida’s already fragile economy.
Facing a massive sink-hole insurance rate increase in the thousands of dollars, retiree John Haun says he’s worried he’ll be forced from his home. “My neighbor just got his bill and he got a $5,000 increase in his,” said Haun.
In a room filled with similar worry, The Florida Association for Insurance Reform (FAIR) brought in a bipartisan panel of local politicians, promising to do what they can to repeal the new law that removed the cap on sinkhole insurance premiums.
Sen. Mike Fasano, a Republican representing the 11th District, says he’ll ask state lawmakers to repeal Senate Bill 408.
“That bill was signed into law by our Governor. It has barely gone into effect and we already see the consequences the people of this area will pay,” said Fasano.
State Representative Robert Schenck, a Republican representing the 44th district, actually voted for the original House bill, hoping it would reduce fraud. Now, he says, he’s worried too many people will be hurt.
“Seventy percent of all sinkhole claims that have been paid out, that money has not been put in to fix that property,” said Schenck, explaining his original position on the issue. “So if you guys want to know why we have so much trouble with sinkhole coverage in Hernando County, that’s why. It’s the rampant fraud.”
Rose Rocco, a Democrat and former Hernando County Commissioner, said fraud should be addressed by the insurance companies and not pushed onto consumers.
“It’s up to the insurance companies or whoever is supplying that service to make sure that they’re paying a claim that’s reasonable and just,” said Rocco. “And to put the blame on people now is unconscionable.”
A mortgage expert also told the crowd it’s not just a concern for current homeowners. People considering purchases of property may be told by banks that they must carry the insurance, which could put a chilling effect on an already depressed real estate market. That could have a ripple effect on the overall economy. Steve Fingerman, with E Loans Mortgage Inc says people will have less money in their pockets.
“You’re all of a sudden gonna be faced with a massive payment increase of $300, $400, $500 a month,” said Fingerman.
Realtors say it’s already having a chilling effect on business, even before the state’s insurance commission decides whether to grant the request from Citizens Insurance to raise the rates.
Some clients, even some from other countries, are already aware of the sinkhole issues, and say they don’t want to take a chance that other insurance companies will quickly line up to follow suit.
Lawrence Sanek, who owns Castle Dream Real Estate, says it’s a problem.
“I have international people saying ‘Tell me about the sinkhole problem. What’s it gonna cost us?'”
The insurance commissioners are not expected to rule on Citizens rate hike request until mid-October, but before then, on September 13 at the Tampa Convention Center, the same commission will be taking public comment in the center’s main ballroom.
The hearing is expected to draw hundreds, perhaps thousand of people.
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(original article writtnen by Eric Glasser at 10news WTSP)