Sinkhole Insurance Nightmare!

[Guest Blog by Ginny Stevans, President of Having Affordable Coverage and a board member of Florida Consumer Action Network]

Well here we go....I said this would happen and it has started. Did our elected officials really think mortgage companies would not catch on about the automatic dropping of sinkhole coverage? The"if they don't ask, don't tell them" that Senator Fasano suggested was not going to work for long!

While I was president of HAC (Having Affordable Coverage) I strongly warned people about the new legislation to automatically drop sinkhole coverage was risky and that when the mortgage companies figured it out it would be required. We already knew of local banks that were requiring it but is only a matter of time before they all will require it. It IS after all a "peril" that can destroy your home and cost tens of thousands of dollars to repair.

Well the proof just came in the form of a letter from US Bank Mortgage Company to a mortgage holder. The letter reads in short that the homeowner who had his sinkhole insurance automatically dropped from his insurance company is now required to maintain his coverage or it will be forced placed.

The letter states "We understand from speaking with many insurance agents located in Florida that catastrophic ground collapse has been added to these policies in lieu of sinkhole coverage. However, our research has indicated major differences between these two perils. A sinkhole is the systematic weakening of the land supporting your home. If damage attributed to a sinkhole were to occur to your home, your property could still be deemed livable by your local authorities. A catastrophic collapse is a geological activity that results in all of the following conditions: 1) an abrupt collapse of the ground cover, 2) a depression in the ground cover visible to the naked eye, 3) structural damage to the building, including the foundation, and 4) the insured structure must be condemned and ordered vacated by a government agency. While we understand the financial burden caused by the current insurance situation in the state of Florida, we are required to ensure your home is covered in the event of damage. Sinkhole damage not only causes significant damage, but the repair costs are very high. Without sinkhole coverage, a homeowner would have to bear the burden of the cost to repair the property while maintaining their monthly mortgage payment."

Now what shall I tell this man who has Citizens Insurance, lives in Pasco County where no other insurance companies are writing and can not afford to ADD the the sinkhole policy back. Not to mention now to ADD the insurance back you will have to have a sinkhole evaluation at your cost. So much for our elected officials working to help lower our insurance!

Ginny Stevans
FCAN Board member and Pasco County Resident