St. Petersburg Times, 9/18/2007

Ad encourages folks to file claims without evidence of damage. Two lawmakers want an investigation.
By JAMAL THALJI, Times Staff Writer

An ad in Sunday's editions of the Pasco and Hernando Times warning homeowners about changes in sinkhole coverage tells them to file insurance claims "even if you do not believe that you have a sinkhole problem."

That drew the ire of two Pasco County legislators. They've asked the state to investigate the ad and those behind it.

"It is nothing more than a way for sinkhole home buyers and repair companies to literally scare up business," said state Sen. Mike Fasano, R-New Port Richey.

Said Rep. John Legg: "The way that reads, it's blatantly encouraging individuals to commit fraud on insurance companies."

The man who bought the ad stands by it, sort of.

Sinkholes are Michael Mosher's business. He has two businesses in the field: one that repairs sinkhole damage, another that buys sinkhole-damaged homes. He paid for the ad under the banner of his Web site, sinkhole.org.

He said he'll reconsider the language of that offending line, but not the spirit of the ad: to warn Pasco and Hernando homeowners to investigate how coming changes in sinkhole insurance will affect them.

"If people are misinterpreting this, I will be happy to re-word this so people don't get the wrong idea," Mosher said. "My idea is a simple one: to inform people what their rights are so they can make a good, quality decision."

What Mosher said he really meant to say is people should have their homes inspected for sinkhole damage before they lose their sinkhole coverage.

All Pasco and Hernando homeowners renewing their policies face a looming decision: drop sinkhole coverage to save money or keep paying for the option.

Those who drop the policy will be insured only if sinkholes render their home uninhabitable. But major damage? That will no longer be covered.

Some companies, like Citizens Property Insurance Corp., will drop coverage unless customers keep the option. Other insurers will keep the coverage unless customers opt out.

So Mosher said many might not know they've already suffered sinkhole damage and that they're about to lose their coverage. But inspections require geotechnic engineers and could cost thousands of dollars. To get an inspection, he said, you have to file a claim.

But the offending line also tells homeowners to make their claims now to "'grandfather' you in under the more favorable law and policy terms."

In a letter written Monday to Florida Chief Financial Officer Alex Sink, Fasano asked the Department of Financial Services to immediately discipline whomever it could for the ad.

Legg sent out a news release Monday condemning the ad and encouraging homeowners with legitimate problems to call the Florida sinkhole ombudsman toll-free at 1-800-342-2762.

Already concerned by the ad, Citizens spokeswoman Christine Turner didn't seem any happier after hearing about Mosher's reinterpretation.

"I don't think it's appropriate for homeowners to file claims just to get an inspection," she said. "If he wanted them to have an inspection ... that's what he could have said in the ad."

The insurer's own numbers show sinkhole claims spiking. Last August there were 64 claims. This August, 149 claims.

Citizens has 54,685 policies in Pasco and 24,098 in Hernando. Imagine, Turner said, if those homeowners listened to Mosher.

"If everyone were to listen to that ad, we could have more than 50,000 claims that may or may not be sinkhole damage that we have to inspect at our dime," Turner said.

Mosher said the purpose of his 7-year-old Web site and ad isn't to attract that business. Nine out of 10 of his inspections, he said, reveal no sinkhole damage.

"This is an advertisement ... to let people know what's happening," Mosher said. "I'm not encouraging anyone to make fraudulent claims at all. I'm sorry if Sen. Fasano and Rep. Legg took it that way at all."