New Law Allows Florida Insurers to Offer Limited Sinkhole Coverage

Legislation introduced this year by Republican Senator Jack Latvala and passed into law today, gives insurers in Florida the ability to offer a new type of personal lines residential sinkhole insurance coverage.

The bill, SB 1274, outlines how insurers can offer limited coverage for “sinkhole loss” and the associated structural damage to the covered building and foundation caused by sinkhole activity.

According to a summary of the bill, limited sinkhole coverage would be subject to the statutory requirements for sinkhole insurance in ss. 627.706-627.7074, F.S., with the following exceptions:

The bill prohibits Citizens Property Insurance Corporation for offering limited sinkhole coverage and establishes surplus requirements of $7.5 million for new and existing insurers that solely transact limited sinkhole coverage insurance.

Insurers providing limited sinkhole coverage must notify the OIR at least 30 days prior to offering the coverage in the state and are required to file a plan of operation and financial projections or revisions to the proposed plan.

The bill takes effect July 1, 2016.