By Jeff Harrington, Times Staff Writer
Wednesday, August 25, 2010
State insurance regulators are investigating what they see as a surge in sinkhole claims outside the traditional "sinkhole alley" in Hernando and Pasco counties.
Florida Insurance Commissioner Kevin McCarty said Wednesday that he has issued a "data call" to the commercial and residential property insurance industry to collect and track claims data related to sinkholes.
Specifically, regulators are seeking information about sinkhole claims opened anywhere in the state between 2006 and 2010. Included in the report will be the types of claims, testing procedures to determine the legitimacy of claims, costs of inspections, locations of claims, legal fees and public adjuster fees and amount of structural loss.
McCarty said the data will help his office learn more about the frequency, severity and location of claims and determine if any regulatory action is needed.
"We're going to try to take it out of the anecdotal realm and into the statistical realm," said Jack McDermott, a spokesman with the Florida Office of Insurance Regulation.
He said the department has heard "worrisome" reports of sinkhole claims as far away from sinkhole alley as South Florida, "which isn't known for sinkholes."
Among other issues, McDermott said, regulators are looking into whether public adjusters are encouraging sinkhole claims; whether sinkhole damage payouts are being properly used to fix property; and whether some homeowners are filing sinkhole claims for undamaged property just to get a "free and clear" bill of health from their insurer.
"Someone trying to sell a house, say, in Hernando County (could) file a claim with an insurance company, which investigates and says there is no (damage)," he said. "They could use it as a marketing piece."
McCarty's office and insurers have cited an increase in sinkhole claims as one of the drivers of higher property insurance rates.
Insurers have until Sept. 21 to submit their findings.