Citizens' Board Votes to Increase Sinkhole Coverage 430 Percent Statewide

Florida's Citizens Property Insurance board voted 4-0 Wednesday to increase sinkhole coverage for homeowner policies by 430 percent statewide.

Board members cited the sharp rise in sinkhole claims and the company's subsequent losses as the need for the increase. In 2010, Citizens took in $32 million in sinkhole premiums, but paid out $245 million in sinkhole claims.

Some areas won't see any change in their sinkhole rates, but areas prone to sinkhole claims will see vast increases. Policyholders in the Tampa section of Hillsborough County, for example, could see their rates rise from $156 to $3,651, an increase of 2,238.5 percent.

Citizens' Chief Financial Officer Sharon Binnun said she understood the sticker shock many policyholders still suffering from an anemic economic recovery will feel, but the company was obligated to secure actuarially sound rates.

"This impact is not lost on us, but this rate is based on Citizens' actual loss experience," Binnun stated.

The proposed rate increase must be approved by the state Office of Insurance Regulation before taking effect.

Full story to follow.