Letter to the Editor: Sinkhole issue spotlights state’s broken insurance system

The following article was published in the St. Petersburg Times on August 7, 2011:

Sinkhole issue spotlights state’s broken insurance system

In Florida we have a provision in all regular homeowner policies that covers catastrophic ground collapse — when a house falls in a hole and is condemned by building officials. Coverage has been there in the past and it is still in all Floridian’s property insurance policies. It is not truthful for anyone to debate sinkhole coverage by stating “any home that falls into the ground is not covered unless they paid for sinkhole coverage” just because extremely large rate increases have been recently proposed by Citizens Property Insurance Corp. It is also not honest to let anyone believe that these huge rate increases are for anything other than for sinkhole coverage.

We have a broken system. People are taking advantage of it each year in an attempt to profit, get out of debt or catch up on neglected repairs. This broken system perpetuates an oddity where expensive testing is rarely conclusive and subject to the interpretation about alleged sinkhole activity.

We have only had “sinkhole coverage” beyond “catastrophic ground collapse” for a little more than two decades. Before then, we all got along just fine without separate coverage in this state. But today people are rushing to cash in on alleged sinkhole claims.

As a direct result of the legislation passed in Tallahassee this spring, these dubious techniques will no longer be allowed for use by sinkhole repair companies, unscrupulous public adjusters or attorneys.

The cost of this dubious activity in the past four to five years is equal to that of a major hurricane. All of Florida suffers because of payouts approaching $1.5 billion and the cost of this “sinkhole activity coverage” should be paid by those who want this extra coverage.

Part of the insurance bill was to strengthen Citizens, which was designed to be the insurer of last resort. The financial status of Citizens is extremely critical to its policyholders and all taxpayers in Florida. The Legislature also listened to private insurers who either aren’t in Florida, have pulled back or have left the state. Private insurers articulated the many changes necessary to improve our market and for private capital to return.

The Florida insurance system needs to get its financial house in order. Stopping the practice of a small number of homeowners, attorneys, adjusters and repair companies cashing in at the expense of all Floridians is a good start. These rate hikes seem painful but may finally bring an end to a broken system.

Greg Armstrong, New Port Richey

Nugent, Bilirakis lack in leadership | July 31, letter

Anti-tax stance is no surprise

I find it interesting that the letter writer criticizes U.S. Reps. Gus Bilirakis and Rich Nugent for not wanting to raise taxes. Why would their anti-tax position be a surprise? Republicans are known for less taxes and less government. What both Bilirakis and Nugent support in Washington is a balanced budget.

If the writer believes that raising taxes is the right thing to do, let him run for Congress. We welcome the challenge.

Bill Bunting, Bayonet Point

Find this article here:  http://www.tampabay.com/opinion/letters/sinkhole-issue-spotlights-states-broken-insurance-system/1184633