Sen. Mike Fasano Urges Gov. Scott to Oppose Citizens' Sinkhole Rate Increase

Submitted by Kevin Derby on August 1, 2011 - 3:07pm

Sen. Mike Fasano, R-New Port Richey, sent a letter Monday to Gov. Rick Scott and Chief Financial Officer Jeff Atwater, calling on them to reject a proposed rate increase for state-run Citizens Property Insurance sinkhole coverage premiums.

Citizens currently has a rate request before state regulators that would hike sinkhole premiums across the state 429 percent. In some areas, the increase would be over 2,000 percent.

Fasano was a staunch opponent of SB 408, which allowed Citizens to ask for a higher sinkhole rate than their annual 10 percent rate hike cap would have otherwise allowed. Ultimately, the bill was signed by Scott, but even other legislators have complained that Citizens' rate hike request has come too soon, and would like to see the provisions in the bill -- aimed at preventing sinkhole claim fraud -- take effect before implementing such a large increase.

The state Office of Insurance Regulation will issue a decision on the request in the coming months.

Here is the letter in full:

Dear Governor Scott and CFO Atwater:

With the media abuzz about the proposed premium increases requested by Citizens, it is time for people in leadership, such as yourself, to step up and take a strong stand on behalf of Floridas consumers. The outrageous and truly unconscionable increases being requested by Citizens for sinkhole coverage will do nothing but hurt honest homeowners and consumers who need this coverage to protect their homes or to comply with the requirements of their respective lending institutions.

The insurance industry special interest insiders carried this bill this past legislative session, as was demonstrated by the passage of SB 408. I opposed the bill in committee and on the floor. Few others spoke out against this bad bill.Unfortunately, the insurance industry won out and this bad bill is now law. It was SB 408 that gave Citizens the green light to request the sinkhole increases that are awaiting action by the Office of Insurance Regulation. I have no doubt the private insurers will soon follow, putting even more Floridians in peril.

If anyone believes that consumers can afford premiums even in the ballpark of what has been requested then they are truly out of touch with the economic reality facing everyday Floridians. Since the requests were made public, constituents have contacted me with what is, for each of them, true horror stories of what will happen if the rates are approved.Just this day a senior citizen showed me a letter from her lender, U.S. Bank, which requires her to carry full sinkhole coverage. Citizens is no longer an option for her. She has nowhere to turn.

Floridians who live in single-family dwellings are not the only ones who will be hurt by these increases. As you may know, current law does not allow homeowners associations, condo associations and manufactured home communities to opt out of full coverage. The rates that will be increased must be passed onto the residents who live in these communities.

Mortgage professionals have also contacted me to express their concerns. Those who broker the loans, which is part and parcel of the housing industry, predict economic disaster if these rate hikes are approved.

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. 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.

Your fellow Floridians await your response.

Yours truly,

Mike Fasano

State Senator, District 11

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