Almost all homeowners in Florida, particularly those that own Real Estate in Hernando and Pasco counties are aware that recently Citizens Insurance has tried to hike the Sinkhole Insurance rates by 447%! Senator Mike Fasano (R-New Port Richey) and groups like FAIR (Florida Association for Insurance Reform) recently led the fight against this Citizens’ proposed increase in sinkhole rates. The efforts of the people were heard and the Florida Insurance Commissioner Kevin McCarthy slashed the proposed statewide average 447% increase in Citizens Property Insurance Corp’s sinkhole rates to just 32.8%. So this means we are safe for now but what will lawmakers allow next year? With the unpredictability of sinkhole insurance hikes and with property values being compromised by other factors, what positive factors so buyers have to feel confident? Well here’s one; if you purchase a repaired sinkhole property with the proper Engineering Report and completion paperwork, there is one less headache to worry about with regard to your investment. You are not required to acquire sinkhole insurance on a recently repaired property, in fact it’s probably initially not even an option. Citizens Insurance will only consider re-insuring for sink hole coverage after 3 years and only subject to their review of the Engineering and Completion reports including possibly even inspecting the home. If you happen to have a good warranty from the contractor who performed the repair then you probably are not going to miss that coverage anyway.
With a repaired sink hole property and a good warranty from the contractor many people are deciding to forego the extra sink hole coverage even years later when the property might actually be eligible for that type of coverage again. The fight against Citizens increases is probably only a temporary victory, and you can be sure that they will be coming back for more sometime in the near future. Citizens’ position is that they have had about 235 Million dollars in claims against only about 35 million in actual sink hole policy revenues. With that type of imbalance they say that rate increases are much needed and inevitable, although they fail to ever discuss the overall revenue they may take in which by the way far outweighs the amount of claims. Regardless, we can rest assured additional increase attempts are on the horizon. It’s become clear that Citizens wants out of the sink hole insurance claim business, although they can arbitrarily cancel all the policies they can make the coverage so unappealing and unaffordable that most people simply elect to go without it.
Since further increase are coming in the foreseeable future, the question comes to mind whether or not homes that have had Repaired Sink Holes with all the proper credentials will become more valuable. In recent months, we have noticed that the stigma attached to repaired Sink Hole homes has steadily lifted and more and more people are being attracted to these types of properties due to not having to worry about carry an added coverage in the home owners insurance policy which will inevitably continue to be on the rise. Consumers should be encouraged to make sure all the proper due diligence is completed on these repaired properties and that the repair comes with a good warranty. Assuming that the due diligence passes, and the warranty is solid however, these homes can be quite a hot commodity in a world of rising insurance costs.
A good Real Estate professional in Hernando County who has experience with these types of properties will be a valuable ally in helping buyers determine what does and does not pass the mustard so to speak. It will be interesting to see what the future holds, but so far judging by recent increased demands for repaired sink hole property in Hernando County it may be a fairly good bet to say these types of properties will continue to be in higher demand as further developments and increase by insurers continue to creep forward on the home owners. As it stands at the moment, these types of properties can still typically be purchased for less than current market value, but as we have already started to see that trend may quickly become a thing of the past.
To See a good example of a Home Priced Under Market Value, with a Repaired Sink Hole and All The Correct Documentation and Warranty Click Here And Check Out 1519 Overland Dr in Hernando County Florida.