State legislators have allowed Citizens Insurance to dramatically increase the premiums it charges for sinkhole coverage. Citizens is a not-for-profit, tax-exempt government corporation. Citizens was established to act as a safety net, or insurer of last resort for the thousands of Florida property owners who were unable to get coverage elsewhere. Unintentionally, Citizens became the largest property insurer in Florida with more than 1.4 million policies now in place. That equates to more than $500 billion in property coverage and nearly $3 billion in annual premiums.
Fortunately, sinkholes are not a major concern in NW Florida. However, counties such as Orange and Hillsborough have been plagued with them. Citizens has proposed sinkhole premiums coverage increases of up to 2,000 percent in such sinkhole prone areas. Citizen’s board voted to limit the rate increases (for sinkhole coverage) to 50 percent next year and then phase in the remaining increases over the next several years.