New Citizens Property Insurance Corp. policy language could reduce sinkhole premiums in Pasco County, Fla. by as much as 56.5 percent and by 43.9 percent in Hernando County – the two Tampa-area counties where sinkhole claims have been most frequent.
Citizens’ board of governors will discuss the dramatic rate reductions to be filed by the corporation, accompanying the sinkhole form filing already made with the Office of Insurance Regulation, says Citizens President Bob Ricker.
“We have listened to our policyholders and have come up with a solution that will bring much needed rate relief in areas plagued by sinkhole claims,” Ricker said. “We are doing this to help keep rates down and, ultimately, get the private sector back into the home insurance market in the affected areas.”
Citizens already filed a notice of intent with the state Office of Insurance Regulation to change sinkhole policy rates. Ricker said the new plan will be discussed at a regularly scheduled meeting of the board Oct. 26 at the Tampa Airport Marriott Hotel.
Citizens has about 180,000 policies in a five-county area on Florida’s West Coast prone to sinkhole claims, primarily in Pasco and Hernando counties.
Citizens paid out about $40 million in sinkhole claims in 2005 and is one of the only insurers in the state actively writing policies in the sinkhole affected areas.
Owners who choose not to buy full sinkhole coverage would still be protected if their home was affected by “catastrophic ground cover collapse” in which their home fell into the ground and was rendered uninhabitable by the sudden formation of a large, deep hole.
Ricker said in the event of a catastrophic ground cover collapse, customers would be eligible for coverage up to policy limits if such collapse were to destroy their home, adding that the base policy will not pay for minor sinkhole damage.
Customers who accept sinkhole coverage will pay a higher annual premium with a required 10 percent deductible on any sinkhole related claim.
“I’m glad we can provide this kind of rate relief for Citizens policyholders,” Ricker said.
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