Fasano aide brings ideas back from sinkhole conference

Lawmakers and business leaders feel the earth move under their feet as they deal with continuing sinkhole problems. The oil spill and hurricane season had seized most of the headlines in recent months.

But then, a few weeks ago, a sinkhole swallowed a 1995 Toyota Camry as the chasm grew larger and larger, threatening the 12 units at Bordeaux Village Condominiums in Tampa.

No longer are sinkholes viewed as isolated problems in Pasco and Hernando counties, according to Greg Giordano, chief legislative assistant to state Sen. Mike Fasano, R-New Port Richey.

Fasano dispatched Giordano to be his eyes and ears at a second conference in Tampa last week on "Sinkholes: the Other Florida Catastrophe." Ideas from the conference likely will turn into legislation next year.

Despite several changes in laws, fraudulent claims remain a concern, Giordano said. Nonetheless, Fasano won't support restrictions that could make it more difficult to pay some sinkhole claims.

The Regency Park area of Port Richey was often mentioned at the conference as a kind of poster child of areas heavily impacted by sinkholes, real and imagined.

Once a desirable haven to retirees, the area has been hit hard with sinkhole claims, Giordano said. A lot of residences have been converted into rental houses, sometimes without structural problems being fixed.

"True sinkhole activity is very rare," Giordano said, citing a discussion he heard at the conference. Only about 5 percent of all sinkhole activity might threaten the structural integrity of a house.

"A down economy drives up sinkhole claims," Giordano said.

Lawmakers have tried to rein in opportunistic sinkhole attorneys and their clients claiming sinkhole damage to their houses. Homeowners simply pocket the payment from an insurance company for sinkhole repairs that are never done. Insurers send repair money directly to sinkhole contractors these days.

Many "public adjusters," however, are popping up now, Giordano reported. The adjusters get a commission on every sinkhole claim, perhaps up to 20 percent. Insurance companies usually are on the hook to pay the expenses to investigate claims.

At one time, adjusters largely had been a phenomenon in south Florida, but more and more of them are migrating to the Suncoast. In 2004, the state counted some 600 adjusters. In the latest count last year, there are now some 3,000 adjusters.

"They wouldn't be growing at that rate if this wasn't a lucrative business," Giordano said. "One of the things discussed is taking away the profit motive for public adjusters."

One proposal would cap the commissions for adjusters. The state of New York places a cap of 12.5 percent on adjusters. South Carolina chose to ban the adjusters outright.

Lawmakers might feel some frustration when residents wind up paying attorneys or adjusters to pursue claims even while free advice and guidance are available from the state.

About three years ago, a high number of claims in Pasco in part had inspired the pilot project here to introduce neutral evaluators on sinkhole claims, Giordano said. The office of sinkhole ombudsman was created as well.

Residents with sinkhole problems don't need to hire attorneys, Giordano said. The state has approved 43 experts as neutral evaluators with no connections to builders or insurance companies. Insurers typically pick up any expenses for the evaluations.

Many people still don't realize they have this option, though, Giordano said. For information, call toll-free 1-800-342-2762.

Another proposal would expand upon a law that requires a note to be attached to the title of a house about a sinkhole claim, according to Giordano.

One concept would have county building departments verifying that the sinkhole repairs are completed through notes on titles. It's uncertain, though, how cash-strapped counties might react to that idea.

A new suggestion would set up a public agency to handle sinkhole claims in much the same way flood insurance is handled, Giordano said.

"It would take the (sinkhole) business out of the private market," Giordano said. Fasano hasn't made up his mind if that would be a good idea.

The Florida Senate Banking and Insurance Committee has decided the lingering sinkhole problems warrant an interim study now. Fasano sits on that committee. Analysts will provide documentation so lawmakers can hit the ground running on sinkhole legislation in 2011.