Sinkhole politics: Who gets heard?

Sunday, January 17, 2010 12:54 AM
(Source: Tampa Tribune)By Donna Koehn, Tampa Tribune, Fla.

Jan. 17--Midday on Friday, Gov. Charlie Crist toured a citrus grove in Polk County, noted the "incredible damage" caused by days of freezing temperatures and signed a letter asking for federal disaster relief for Florida's farmers.

That same afternoon, Sergio Plaza stood quietly, a protective arm around his 7-year-old daughter, staring at his condemned house. His driveway and front yard are no more, consumed by a 35- to 40-foot sinkhole Wednesday. The Plant City home he bought in 1991 on a friendly residential cul-de-sac now teeters on the edge of a pit.

He has insurance that will cover it -- at least he hopes so.

No doubt, January has been exceptionally hard on Florida's farmers, who, in the peak of the strawberry growing season, have been desperate to keep their livelihood from freezing to death. Eleven straight nights of icebox temperatures led to 11 nights of watering to cover the strawberry plants in a protective coat of ice.

But that same plant-saving process plunders the aquifer, leading to unpredictable sinkholes and residential wells that run dry. This year, the aquifer -- a naturally occurring layer of water underground -- dropped about 60 feet, putting water out of reach for many who live in eastern Hillsborough County without access to municipal hookups.

Those experienced in the wintertime ritual knew to shut down their well pumps, but newcomers had no idea their expensive motors would burn up if the temperatures -- and therefore the aquifer -- dropped. And no one can guess whose house or street might suddenly cave in, although those who live near a large strawberry field seem especially vulnerable.

It's not a new problem for people who live in eastern Hillsborough, but the misery this year is extensive.

So far, the Southwest Florida Water Management District -- residents' first stop in a lengthy, sometimes confusing bureaucratic process required to see whether they are eligible for help -- has taken complaints about more than 600 homes without water.

The number of sinkholes grows each day, threatening more houses and closing roads, including, for several maddening days last week, Interstate 4. No one knows when the sinkholes will stop or whether weekend rains will aggravate the unsteady earth.

Strawberry city

Living with misery and anxiety breeds resentment, even in the small town of Plant City, the strawberriest place on Earth. With its berry-bedecked downtown decor, its annual strawberry festival and the crowning of wholesome strawberry queens, the city owes much to its farmers.

That's true now more than ever.

State agency to weigh in on sinkhole situation

Tuesday, January 26, 2010

BAY AREA (Bay News 9) -- The state agency that governs water usage is taking a closer look at the recent sinkhole situation.

Southwest Florida Water Management District officials are meeting today in Brooksville to discuss the issue.

Public workshops will follow in the near future.

More than two dozen sinkholes shut down roads and swallowed up homes across multiple Bay area counties during the past few weeks. Some blame has been put on farmers using sprinklers to save their crops during the recent cold spell.

During the freeze, farmers sprayed millions of gallons of water on their crops to keep them from being damaged by the cold, and as a result the water level in the underground aquifer dipped lower than it had in decades.

Geologists say the dip caused some two dozen sinkholes to open up around Plant City, swallowing a mobile home, closing roads and shuttering an elementary school.

Swiftmud officials said they received hundreds of calls about malfunctioning or dried up wells as a result of the heavy sprinkler usage.

"We want to get input from the community,' said Swiftmud spokesperson Robyn Felix. "We'll talk to growers and local governments and take that feedback to develop recommendations for the governing board.'

Officials said although this is just the first of many meetings, a plan hopefully would be in place for water usage before next winter.

Sen. Fasano offers advice on sinkhole insurance

By CAROLE DICKEY Tampa Bay Online
Published: February 3, 2010

SHADY HILLS - State Sen. Mike Fasano, R-New Port Richey, talked about sinkhole insurance at the Citizen Police Academy Alumni Association meeting in January at Safety Town.

"We've done some things over the last couple of years that I'd like to throw out at you that may help you reduce your premium," he said to a crowd of close to 100.

He said that Citizens Property Insurance Corp., the state's homeowner insurance safety net, offers clients the option of selecting full sinkhole coverage or just catastrophic ground cover collapse coverage. Catastrophic ground cover collapse is when the home is deemed unsafe to live in, he said.

By selecting the catastrophic option rather than full sinkhole coverage, premium cost can be reduced by 40 percent to 50 percent, he said. Some private insurance companies do not offer the catastrophic option, he said.

Citizens was created in 2002 to offer coverage to Florida homeowners who can't get insurance.

"Citizens is no longer being seen as a last resort," Fasano said. "It's not like it used to be in the past, where you could only go into Citizens if there was no other choice. If a carrier won't give you a comparable policy of what Citizens will offer you, you can go into Citizens."

During a question-and-answer period, Dan Dede asked, "Can an insurance company mandate that you take sinkhole insurance? When I called up my insurance company, they told me I had to have sinkhole insurance. I said, 'No, I don't,' and they said they require it."

They can require it, but Fasano said it surprises him that they do, since it increases the carrier's risk while increasing the policy's cost.

Dede went on to say his carrier had canceled his insurance.

"You were probably already on the list to get that six months' notice," Fasano said. "I would imagine within the next five to 10 years, everyone in this room will probably be on Citizens, especially here in Pasco County. There is a problem," he said.

Sinkhole claims paid out in Pasco County soared from a couple hundred thousand dollars in 2001 to $45 million in 2005, he said.

Fasano also said the state now requires that the insurance money paid out be used to fix the home.

"Sadly, many of those homes that were claimed for sinkholes and the insurance company paid them the limit, the people never fixed the sinkholes. They sold the house for 50 or 60 cents on the dollar, and now a home is sitting there that has a sinkhole that was never fixed, and the rest of the community suffers for it," he said.

Jimmy Gardner said his insurance company, Nationwide, was going to drop his sinkhole coverage, which would lower his policy by $1,000. He had a sinkhole inspection done, which cost $140. He paid half, and Nationwide paid half.

"They found no problem, and I saved $1,000," Gardner said. "But if I want sinkhole coverage now, it's going to cost me $1,300."

Fasano said sinkhole coverage probably will get more expensive.

He also suggested other ways to reduce policy costs. Homeowners can increase deductibles on personal items and windstorm damage, which will lower the cost.

They also can include a windstorm mitigation discount.

An inspector, at a cost of $100 to $150, checks the home to make sure there are no problems that would increase the likelihood of windstorm damage. If there are no problems, the inspector fills out a form for the insurance company, and the premium should automatically be reduced by law an average of 12 percent to 13 percent, Fasano said.

Another possible reduction is based on the value of a home.

If a Citizens premium indicates the value of a home will continue to go up, and the homeowner knows the value is going down, he can have a structural appraisal done at a cost of about $200.

If the appraisal is lower than the replacement cost Citizens suggests, they will take it. "We've saved people hundreds and sometimes thousands of dollars," Fasano said.

"Go home and check your policy," Fasano said.

"I urge you to challenge your agent, challenge your insurance company.

"Don't be afraid.

"Challenge.

"Demand.

"Ask questions.”

Catastrophic Ground Cover Collapse Coverage—What Does It Cover?
Visit us at www.sinkholelawyer.com

When it comes to insurance policies, like many things in life, cheaper is not always better. Often less expensive coverage equates with less inclusive coverage. A new Florida sinkhole insurance law, created on the premise of reducing costs for the insured and insurer alike, will likely actually result in additional economic strain for already-struggling property owners.

How Does the New Law Differ?

Signed into law by Governor Charlie Crist on June 1, 2009, Senate Bill 742 (which becomes effective January 1, 2010) will give insurance companies that provide coverage to Florida homeowners and businesses the option of not renewing sinkhole loss coverage for property owners in Pasco and Hernando counties. Instead, the insurance companies can replace this coverage with catastrophic ground cover collapse coverage.

The problem for homeowners, though, is that this coverage is not equivalent.

Sinkhole loss coverage encompasses all losses caused by sinkhole activity, provided there is damage to the building and its foundation as a result. This includes any damage caused by the settlement or weakening of the ground supporting a property as the result of the shifting or subsidence of soil, sediments or rocks into a subterranean hole created by water in the underlying bedrock.

Catastrophic ground cover collapse, on the other hand, covers only a small portion of damages caused by sinkhole activity. Under Florida law, catastrophic ground cover collapse includes geological activity resulting in the following:

Abrupt loss of ground cover
A depression in the ground clearly visible to the naked eye
Structural damage to the building, including the foundation
Government condemnation of the insured structure and an order to vacate the premises

By the express terms of the coverage, catastrophic ground cover collapse only covers damages when the insured property is condemned by a governmental agency and ordered vacated. Consider the damage that the property must sustain before a government agency would force a family out of their home, and it becomes clear just how worthless this coverage is.

A home or other building can suffer incredible damage without reaching the point of condemnation. If the property only has catastrophic ground collapse coverage, the property owner will be required to pay all of the repair costs.

What Are the Practical Consequences of the Change?

The new law does not prohibit sinkhole loss coverage; homeowners can purchase additional insurance to cover the broader range of sinkhole-related losses. However, this coverage will result in higher insurance premiums. Additionally, if an insurance company drops the sinkhole loss coverage, the company will require an inspection before insuring the property again. This inspection, performed at the insured’s expense, can easily cost hundreds of dollars. Some mortgage providers, in fact, require sinkhole coverage, essentially forcing property owners to incur the costs of the expanded insurance and the inspection.

Rather than purchasing the additional sinkhole insurance coverage, home and business owners could choose to accept the less-inclusive catastrophic ground cover collapse coverage. However, because this coverage is so limited in scope, many property owners with damage relating to sinkhole activity will be required to pay for the damages out of pocket.

Ultimately, property owners are caught between a rock and a hard place — they either resign themselves to paying higher premiums for expanded coverage, or they are stuck paying for costly repairs when sinkholes damage their homes or businesses and their foundations. In Pasco and Hernando counties, colloquially known as “the sinkhole capital of the world,” this damage seems almost inevitable.

Given this precarious situation for property owners, some have argued that rather than reducing costs for the insured, this new law only lowers costs for insurance companies. By not renewing policies and forcing all policyholders to complete inspections before providing coverage again, the insurance companies can sift through properties with signs of sinkhole damage before providing the same coverage they had previously offered. By providing fewer sinkhole policies, the insurance companies will probably have to pay fewer claims when sinkhole damages develop.

Only time will reveal the ultimate effects of this new law, but currently it appears rather unfavorable for property owners. If you have questions about the new catastrophic ground cover collapse coverage and how it the changes will affect your property rights, consult a lawyer who has experience handling sinkhole damage claims and their consequences.