New Florida Sinkhole Insurance Law Raises More Questions Than It Answers, Says Yesner & Boss Attorney

The new Florida law regulating property and casualty insurance raises more questions than it answers regarding sinkhole insurance coverage, according to lawyers at Yesner & Boss, PL. Signed into law May 17, 2011 by Governor Rick Scott, Senate Bill (SB) 408 cleared the path for substantial rate increases for sinkhole coverage in Florida.

“To suggest that review of the approved bill is confusing is an understatement,” said Brian M. Hoag, who leads the litigation department at Yesner & Boss and handles sinkhole insurance claims. “After countless reads, luncheons and discussions with many seasoned sinkhole attorneys, geologists, and geotechnical and structural engineers, the most basic explanation of SB 408 is that the new law is going to dramatically affect the largest investment for most consumers...their home.”

In mid-October, Citizens Property Insurance Corp. approved a premium increase of 32.8 percent for Florida residential sinkhole coverage and 6 percent for non-sinkhole coverage. The state-run organization had originally requested rate increases of more than 2,600 percent in some local areas, but those increases were rejected by the Office of Insurance Regulation in September.

Prior to SB 408, Citizens gradually increased rates by a maximum of 10 percent annually. The passage of SB 408 eliminated the cap at which Citizens could raise rates.

Many homeowners will elect not to carry sinkhole coverage, which, in turn, will provide no relief in the event of sinkhole related damages to their homes. In those instances where the mortgage holder will require the sinkhole coverage, the rate hikes will be unaffordable to some, and could contribute even more to the housing crisis, said Hoag.

Even more alarming, assuming that the homeowner will have available sinkhole coverage, the passage of SB 408 created additional provisions designed to limit consumer access to policy proceeds. Such provisions include a new process for insurers' investigation of sinkhole claims, changed the definition of a sinkhole loss to include a further defined structural damage, and limited the timeframe for filing a claim from five years to two years.

Furthermore, many private sector carriers are expected to drop sinkhole coverage altogether or dramatically increase the deductible.

“One thing is certain: Before your current policy expires, now is the time to pursue any potential sinkhole claims,” said Hoag. “Otherwise, it’s going to cost you a whole lot more later.”

Yesner & Boss maintains offices in Sarasota, Tampa, St. Petersburg and Vero Beach. The firm offers a full range of legal practice, including civil litigation, bankruptcies, business law, family law, personal injury, tax law, real estate litigation, foreclosure defense, short sales, residential and commercial real estate closings, and wills, trusts and probate. For more information, visit www.yesnerboss.com.

Yesner & Boss, PL
9800 Fourth Street North, Suite 402
St. Petersburg, FL 33702
www.yesnerboss.com

Media Contact: Sheila Brannan Longo, (941) 355-3006
Thomas & Brannan Communications

This release was published on openPR.