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Sunday, Apr 22, 2018
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Sinkhole bill needs more protections, insurance panel says

TALLAHASSEE — The head of the Senate’s Banking and Insurance committee scuttled consideration of a sinkhole repair bill after skeptical members raised concerns over its effectiveness.

Chairman David Simmons, R-Altamonte Springs, postponed the bill (SB 416) that would create a sinkhole repair program under Citizens Property Insurance Corp., the state’s largest insurer.

Senators challenged the bill’s sponsor, telling Wilton Simpson, R-Trilby, that the measure didn’t go far enough to protect more homeowners.

Others worried it could lead to unscrupulous practices by contractors seeking sinkhole-mitigation work.

“We didn’t have time to go around and explain the bill in depth,” Simpson said after the meeting. “A lot of the concerns that they raised are the same exact concerns that got us here.”

The measure would form a “Citizens Sinkhole Stabilization Repair Program.” Policyholders with a sinkhole claim would select from a pool of qualified contractors, who would guarantee repairs with a 5-year warranty.

The idea is to control the costs of sinkhole claims and the likelihood of later lawsuits over botched repairs.

The Tampa Bay area is known as “sinkhole alley.” Two-thirds of sinkhole damage reported to the state Office of Insurance Regulation in 2006-2010 came from Hernando, Hillsborough and Pasco counties.

The value of sinkhole claims for all insurers across Florida was $1.4 billion from 2009-11, according to the office.

Citizens, a nonprofit government corporation meant to be the insurer of last resort, is obliged to cover homes in sinkhole prone areas.

Sen. Alan Hays, R-Umatilla, told Simpson he worried that some contractors would resort to questionable practices to get picked.

“If two or three contractors are on the list to be chosen, and the homeowner has the choice, I don’t want them to be subjected to various enticements,” Hays said. “I know it’s against the law, but I’d want significant preventive measures in this bill.”

Sen. Gwen Margolis, D-Miami, said the repair program should be open to more than just Citizens policyholders.

“We’re taking care of a problem just for people who are insured by Citizens,” she said. “We’re not taking care of the problem for everybody else. You need to deal with all of the insured people or the rest of the community is going to be a mess.”

Sen. Tom Lee, R-Brandon, said Citizens could put “tremendous pressure” on contractors to do repairs on the cheap, and on independent reviewers to verify the soundness of the work if they all want more jobs.

If the insurer isn’t happy, contractors and reviewers “aren’t getting any more work, and they know it,” Lee said.

Simpson said all parties would be bound by an outside engineering report as to the quality of the work, but Lee was still dubious, noting how technical experts often duel in a trial.

“We’ve all seen how professionals who were trained in math and something as objective as engineering could disagree so profoundly on a set of issues that exist on a property,” Lee said.

In previous years, the Legislature made it harder for people to qualify for sinkhole claims.

In 2004, “you could get paid for having a sinkhole because you had a crack in your driveway,” said Sen. Nancy Detert, R-Venice. “Now you practically have to have your house fall in a hole … and your insurance man better be a geologist while he’s at it. We really raised the bar.”

Simpson said he will continue to refine the bill until it is called back before the panel.

Lawmakers return to Tallahassee next month for another round of committee hearings before the annual legislative session starts on March 4.

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