• Florida's Citizens Property Insurance Reinstates Limited Coverages for Sinkhole, Mobile Homes, Builders' Risk
  • April 2, 2013
  • Law Firm: Colodny Fass Talenfeld Karlinsky Abate Webb P.A. - Fort Lauderdale Office
  • At its meeting last Friday, March 22, 2013, Florida's Citizens Property Insurance Corporation ("Citizens") Board of Governors ("Board") approved a slate of coverage changes to benefit mobile homeowners, properties under construction and policyholders with previous sinkhole claims.  The approved changes will go into effect once the modifications are filed and approved by the Florida Office of Insurance Regulation.

    According to Citizens' news release issued today, the Board approved the coverage changes based on additional analysis and consultation with consumers and other stakeholders, which revealed that these coverages are not widely available in certain markets.  Thus, the revisions are being made in response to those adopted last year aimed at reducing exposure, as well as pursuant to SB 408, which made substantial changes to many aspects of Citizens coverage.

    Sinkhole Coverage

    Homeowners with prior sinkhole claims who have made all sinkhole-related repairs in accordance with the original engineering recommendations will be eligible for coverage regardless of whether the prior loss was a partial or total loss.  Coverage will be available that includes the more comprehensive open-peril policy, with or without sinkhole coverage.  Under previous rules, Citizens was unable to offer coverage on homes in which the policyholder had met or exceeded policy limits due to sinkhole activity.

    Policyholders who have made repairs that differ from the original engineering recommendation will be eligible to for a named-perils policy to protect them against non-sinkhole related losses.  Policyholders who have made no repairs will continue to be ineligible for Citizens coverage.

    All properties with prior sinkhole losses are subject to underwriting review and inspection requirements.

    Builders' Risk Coverage

    In response to requests by Florida's Governor and Cabinet to reduce its exposure, Citizens last year stopped writing Builders' Risk policies, which provide protection during new home construction or renovations.  Subsequent feedback indicated that the private market is not currently providing capacity/coverage for a limited number of risks.  In response, the Board approved a targeted reinstatement of Commercial Builders' Risk/Renovation Wind-Only coverage for single-family homes located in coastal territories.  The coverage cannot exceed $1 million.

    Mobile Home Buybacks for Carports/Attached Enclosures

    In an effort to address the increased loss exposure created by structures that are more vulnerable to wind damage, Citizens made policy changes in 2012 to eliminate coverage for screened enclosures, carports and other similar structures.  In some cases, the new restrictions have prevented mobile-home owners from complying with requirements within their communities.  In response, the Board approved a limited buyback option that will allow mobile-home owners to purchase coverage for attached carports, screened enclosures and covered patios up to a limit of $10,000.  The coverage will be limited to actual cash value and subject to policy deductibles.  Awnings, screens, aluminum framed enclosures, gazebos and other similar structures will remain ineligible for coverage.