Florida Insurance Commissioner Kevin McCarty (“McCarty”) said this week that he intends to phase in the expected significant rate increases for sinkhole coverage.  As previously reported here, sinkhole coverage was a significant component of Florida recent property insurance reform legislation.  Part of this reform was to lift a cap on rates charged by Citizens Property Insurance Company, Florida’s state-sponsored insurer of last resort.

Based upon the recent legislation, Citizen’s board voted unanimously to recommend rate increases that average 429% percent statewide after the Legislature.  Reportedly, in 2010 Citizens collected roughly $32 million in sinkhole premiums but paid out more than $245 million in sinkhole claims.  But McCarty recently said the board may have failed to take into account provisions in the property insurance reforms designed to reduce Citizen’s losses by targeting fraud.

For more information see here.