New limitations on Florida sinkhole insurance imposed

Sinkhole InsuranceFlorida Governor Rick Scott has signed off on a bill that will change the state’s property insurance regulations. The bill was proposed several months ago and has been the subject of controversy since its introduction. Opponents of the bill call its provisions “anti-consumer.”

State officials, however, say that the bill is a necessary measure to combat fraud. The Governor approved the law only six days after it arrived on his desk, drawing the ire of a number of consumer advocacy groups who stood in opposition of it.

The new law will allow the state’s insurance companies to impose limitations on sinkhole coverage. Insurers have raised concerns in the past that many claims associated with damage from sinkholes may be fraudulent. In most cases, when the damage is inspected it is little more than a crack in the pavement of a driveway. Many of these claims are denied after costly tests determine that there is no sinkhole.

Insurance companies will also be able to increase rates by as much as 15% to help cover the cost of reinsurance. The time in which claims can be filed for wind damage has also been shortened from 5 to 3 years.

“Insurance companies will only get richer while policyholders will have to pay more for what will amount to less coverage,” says Senator Mike Fasano of New Port Richey, Florida. He has been a staunch opponent of the bill since it was first introduced. Governor Scott insists that the new law will help stabilize Florida’s imbalanced insurance market.

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