TALLAHASSEE, Fla. – Jan. 4, 2010 – The start of 2010 brings with it the enactment of new state rules and regulations relating to sinkhole insurance and property taxes.

Effective Friday:

• Sinkhole losses, Part 1 (SB 742 from state Sen. Mike Fasano, R-New Port Richey): Private insurers can “nonrenew” existing sinkhole coverage for properties in Pasco and Hernando counties, where sinkhole claims have mushroomed over the years.

Insurers that do this must notify the policyholders and offer alternative coverage that includes “catastrophic ground cover collapse,” excluding sinkholes. Catastrophic ground cover collapse refers to extreme damage in which a property is essentially destroyed and uninhabitable.

If they choose, those policyholders may buy back sinkhole coverage at additional cost. However, issuance of such coverage, in the form of a policy endorsement, may be subject to a property inspection. Those who choose to go without the extra coverage must receive a credit or discount. Bill sponsors said those discounts could halve some policyholders’ premiums, which have been increasing because of the rise in sinkhole claims.

• Sinkhole losses, Part 2 (SB 742 continued): The bill also requires the state to implement a grading system to determine how effective local sinkhole loss prevention ordinances are at preventing sinkholes and reducing the severity of damages. Each ordinance will be graded four years upon taking effect.

The state will mandate discounts on property insurance policies based on (1) a property’s compliance with such sinkhole ordinances and (2) the effectiveness of those ordinances.

• Beefing up TRIM notices (HB 701 from Rep. Matt Hudson, R-Naples): Existing law requires property appraisers to send taxpayers “Truth In Millage” notices, which indicate how the payer’s bill will be affected if the local taxing authority does or does not adopt a taxing proposal for the coming year.

The state has not mandated that actual millage rates appear on TRIM notices – until now. Starting next month, TRIM notices will also have to list the prior year’s millage rate, the proposed millage rate for the coming year if proposed budget changes are made, and the rate if the proposal is not adopted.

Copyright © 2009 Tampa Tribune, Fla., Catherine Whittenburg. Distributed by McClatchy-Tribune Information Services.