TAMPA - Citizens Property Insurance Corp. announced Thursday that it plans to end coverage for screened swimming pool enclosures and limit coverage for sinkhole damage.

The sinkhole coverage changes - which must be approved by state insurance regulators - present a mixed scenario for homeowners in Pasco and Hernando counties, where a lot of sinkhole claims have been made to Citizens. The company paid $60 million for such claims last year, primarily in the Tampa Bay area.

Citizens' proposal for limited sinkhole coverage would mean potentially smaller rate increases. But such rate relief wouldn't come until 2007 or 2008, depending on when homeowners covered by Citizens renew their annual coverage. That delay may be the last straw for many policyholders in Pasco and Hernando who already have seen premium increases of 100 percent or more in the past year and face another jump in the fall.

Sinkhole coverage would be reduced to nothing under the proposal unless policyholders paid an extra fee to buy back limited sinkhole coverage for up to $50,000.

"This is the only way to give folks rate relief," said Paul Palumbo, Citizens vice president of claims.

Citizens has not released specific rates for the optional sinkhole coverage, and it has not said what the cost will be for a policy without sinkhole coverage. The company hopes to figure out the new rates by September and implement them by March.

Douglas said the savings "would be significant" but that Citizens still was calculating the premiums under the various options of its plan.

Pool Enclosure Change Unique

Also Thursday, the state-sponsored insurer of last resort announced plans to end coverage for screened swimming pool enclosures. Citizens officials said such structures do not stand up well to hurricane winds and thus are uninsurable.

Citizens is thought to be the first insurer in Florida to propose ending coverage for pool enclosures. Some insurers have coverage limits, such as State Farm, which caps coverage at $15,000.

"We lost tens of millions of dollars replacing pool structures destroyed in the hurricanes," said Bruce Douglas, chairman of Citizen's board of governors.

The surprise announcements came at the insurer's board meeting in Orlando. The company said the new measures would help the insurer in its effort to stabilize rising rates for its 850,000 policyholders. Both plans are subject to approval by the state Office of Insurance Regulation.

Lost Houses Would Be Covered

The broad sinkhole coverage Citizens would eliminate is now a standard part of insurance policies in Florida. Instead, customers could either go without sinkhole coverage or buy optional coverage of $10,000, 25,000 or $50,000.

Despite the limits, the company noted that it still would cover a house being swallowed by a sinkhole - even for those who waived coverage for what is known as a cover-collapse sinkhole.

But the majority of the company's sinkhole claims - that Citizens officials say amount to nothing more than minor foundation cracks due to house settling - would not be covered unless optional coverage were purchased.

One advocacy group is not impressed with Citizens' latest proposals.

The insurer's plan comes a little too late for help, said Barbara Polsky, a founder of the Homeowners Against Citizens organization and a Port Richey homeowner.

"People will be losing their homes before the end of the year," she said. "We can't afford the rates now."

Polsky, 64, and her husband, Harold, saw their Citizens rates double at renewal time in November from a little above 1,000 to more than $2,000.

Polsky said the couple can't pay the high rates on their modest one-story house, a situation faced by many in Pasco County.

She said she is retired and her husband makes $13.20 an hour as a customer service representative at Home Shopping Network.

Polsky said she is dreading her new Citizens bill this fall.

"We will be forced to move out of the state of Florida by the end of December," she said.

Contact Randy Diamond at

rdiamond@tampatrib.com or (813) 259-8144.