Floridians Surprised by Increased Deductibles from Sinkhole Damage
Many Florida homeowners with sinkhole insurance provided by Citizens Property Insurance were recently shocked to learn that their deductibles had grown at an alarming rate. Unfortunately for some, this increase was discovered only after they had already performed expensive sinkhole damage repairs – meaning they were already on the hook for the costly deductible, which can often add up to tens of thousands of dollars.
Citizens’ deductible increase for sinkhole damage
According to the Tampa Bay Times, the recent sinkhole insurance deductible change now compels homeowners to pay 10 percent of the insured value of a home before Citizens will start to pick up the tab. While previous sinkhole policies had the option of selecting the 10 percent deductible – often chosen to decrease premiums – it was one among multiple options for homeowners.
It is also important to note that sinkhole deductibles are based on a home’s “insured” value and not the home’s actual or market value. Given the fact that homes are often insured for more than their market value – especially given that home market values have dropped in many areas – the new sinkhole deductible can increase dramatically.
For instance, imagine a homeowner who bought his home in 2007 for $500,000, and consequently obtained insurance coverage in that amount, with a sinkhole damage deductible of $5,000. However given the lull in the housing market, the home was recently appraised at only $350,000, even though its insured value is still $500,000. If this homeowner’s property were to experience sinkhole damage, he would be responsible for 10 percent of $500,000, or $50,000, before Citizens would start to pay for repairs – which is a massive increase from his previous deductible of only $5,000. Making the situation even harder to swallow is that this hypothetical homeowner didn’t even realize his deductible had risen until after he filed his sinkhole insurance claim.
Many state lawmakers are concerned not only with the size of the recent deductible increase but how homeowners are going to come up with this money. For instance, State Rep. Mike Fasano recently spoke out regarding this concern when he was quoted as saying by the Tampa Bay Times, “There’s no way many [homeowners] could come up with $20,000. There’s no way a working family can come up with that kind of money.” Fasano has said he is looking into legislation as a way to give homeowner’s a smaller deductible option or to stop the higher deductible altogether.
Tragically, this recent sinkhole insurance deductible increase has made the often frustrating task of filing a sinkhole claim even more maddening. Consequently, it is often best to seek the advice of an experienced sinkhole claim attorney if your property has suffered sinkhole damage. A knowledgeable attorney can provide competent guidance and help you navigate through the sinkhole insurance claim process.