Sinkhole coverage may not be required

TALLAHASSEE, Fla. - If your house falls into a sinkhole, it is considered 'catastrophic ground cover collapse' under insurance legislation steaming through the state Senate, and it would be covered.

However, insurance companies would not have to offer coverage from cracks that develop because of shifting ground.

State Senator Mike Fasano spent most of Wednesday morning trying to convince the Senate to require coverage of both cracks and collapse.

“You will have people who want to buy a home in this state, that will not be able to get sinkhole coverage,” Fasano said. “Therefore, they will not be able to get sinkhole coverage.”

Sinkhole losses have sky rocketed in recent years. Sponsor Garrett Richter says many of the claims are fraudulent.

“Policyholders are receiving checks, large checks for small cracks,” Richter said. “They’re taking these checks, they’re not repairing the property. They’re taking these checks, they’re paying their mortgage off, they’re buying a boat.”

Fasano lost the fight, for now. The House still wants to require sinkhole coverage, so let the negotiations begin.

Richter believes insurance companies will offer the sink hole coverage, even if it is not required.

“If I’m wrong? Then there is an insurer of last resort, as designed,” Richter said.

If the Senate wins out and only catastrophic collapse ends up being required, thousands of homeowners could be forced into state run citizens, or non-regulated out-of-state companies as early as June.