Taylor Yarkosky has made a career out of fixing cracks in driveways, walls and foundations. Most of his customers live in homes damaged by sinkholes. “We underpin homes were we actually put your home basically on underground pilings so that it essentially will never move again.”
Normally insurance pays the bill, but a 2011 law removed sinkhole coverage from basic homeowner policies. Now customers have to pay extra for sinkhole protection.
Basic coverage will still pay for homes that are swallowed up by a sinkhole, but what it no longer covers are cracks in driveways and walls and foundations that are compromised by sinking ground.
Since sinkhole coverage was removed, Citizens Property Insurance has tried to raise rates for the extra coverage. Thursday Citizens requested an increase of more than 100 percent in some areas. In Tampa Bay, the coverage could increase 50 percent.
“It’s not their fault that they live in an area that has this issue, that’s like telling people in Miami that they are no longer going to have hurricane coverage,” said Taylor.
Citizens says sinkhole claims are just too high. In 2011, it collected 50 million dollars for the coverage, but paid out 135 million. Governor Rick Scott has long advocated reducing Citizens risk by enticing customers into the private insurance market, but isn’t saying if he supports the higher rate. “We have a significant amount of risk for a very small surplus.”
Scott’s fears that if Citizens continues to insure 1.4 million homes, when disaster strikes, the public insurer will go bankrupt and taxpayers will have to pay the claims.
Although the Citizens rate hike hearing was held Thursday, the Office of Insurance Regulation will continue to take email comments by clicking on the link below. It could be weeks before OIR decides if or how much Citizens can raise rate.