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Fasano and Legg at odds over SB 408, but not sinkhole insurance rates
Posted Aug 1, 2011 by Catherine Whittenburg, Tallahassee bureau
Updated Aug 1, 2011 at 03:49 PM
Rep. John Legg and Sen. Mike Fasano don’t see eye-to-eye on the legislation that enabled Citizens Property Insurance to jack up optional sinkhole coverage rates by more than 400 percent statewide—and more than 2,000 percent in the Tampa-Bay area. But both Pasco County lawmakers are trying to stop the rate hikes from taking effect.
Legg, who supported SB 408, is touting the anti-fraud components the legislation, saying today in a letter to state Insurance Commissioner Kevin McCarty that Citizens ought not to be permitted to raise rates so dramatically before those provisions have a chance to lower the insurer’s costs. (OIR must approve the rate increases before they can take effect.) “Based on testimony and analysis undertaken throughout the legislative process, it is clear that this new definition will result in the filing of fewer claims,” Legg writes.
Fasano, who fought hard against the bill and blasted it as “the most anti-consumer piece of legislation to come before this Legislature,” scoffed last week at Legg’s use of SB 408 to argue against the rate hike. But Fasano is likewise fighting the rate hikes, and was the first to propose multiple, statewide hearings on it.
Legg includes a similar suggestion in today’s letter to McCarty. ” We also respectfully request that you conduct public hearings in the regions that were adversely affected in order to fully assess the magnitude that these rate increases would have on Florida homeowners.”
Shortly before Legg released his letter, Fasano released two of his own, addressed to Gov. Rick Scott and Chief Financial Officer Jeff Atwater, on whom Fasano is calling to stand with him against the rate increase.
“It is time for statewide elected officials to take a stand against this request. Like me, you have been elected to represent the needs of your constituents,” Fasano said. ” They are awaiting your voice and involvement to fight these rate increases that will definitely enrich Citizens but at the price of people possibly losing their homes.”
McCarty has said he will take the suggestion that he hold multiple hearings outside of Tallahassee “under advisement.”
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Reader Comments
Por (Roman) on August 02, 2011 (Suggest removal)
We have a darn good example of how claims costs affect insurance premiums, courtesy of Citizens. Money being paid out in claims needs to correlate to money coming in from premiums. In other words, rates have to reflect true costs. The true cost of sinkholes for Citizens’ customers shows a need for an average statewide rate increase of over 400 percent. In the “sinkhole alley” of Tampa Bay, astronomical losses need a rate to match. Of course, there are many people shocked by this rate hike news, and I must ask why they are not equally shocked by the costs that made the rate increase necessary in the first place. You cannot look at only one half of this math problem.
Suggest removalPor (Roman) on August 02, 2011 (Suggest removal)
A fuzzy, one-sided focus only ignores the circumstances that made the rate increase necessary in the first place. What came first was the dramatic increase in sinkhole CLAIMS, but there is no geological evidence showing Florida is experiencing more sinkHOLES.
Geologists cited in a FL Senate report on sinkholes said there is no geological reason for sinkhole claims to be doubling and tripling over the past several years. There are economic reasons, however, and the report suggested that some people, with assistance from unscrupulous public adjusters and attorneys, have enriched themselves by claiming they had sinkhole damage. FL insurers have been forced to pay claims for minor cosmetic damage and expensive sinkhole testing.
Suggest removalPor (Roman) on August 02, 2011 (Suggest removal)
SB 408 adresses the huge problem with sinkholes, rather than continuing to ignore it and letting counties with few sinkhole claims subsidize areas where damage is not necessarily more prevalent, but claims sure are.
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