The Tennessee General Assembly has passed a bill that consumer advocates believe could be bad news for homeowners in this part of the state. Both the House and Senate voted this week to approve legislation that will reduce or prevent insurance claims involving property damages caused by a sinkhole.
The bill’s House sponsor, Rep. Roger Kane, R-Knoxville, said the measure was needed to correct a faulty 2006 act that was modeled after a Florida law. Kane, himself an insurance broker, said that law led to a substantial increase in claims involving sinkholes in Tennessee.
Current Tennessee law requires that every “insurer offering homeowners property insurance in [Tennessee] shall make coverage available for insurable sinkhole losses on any dwelling.”
Supporters of the measure say that mandate will not change under the new law, but it will require a third party to analyze sinkhole cases to prevent fraudulent claims.
Critics of the bill, however, argue it’s anti-consumer legislation that is aimed at giving insurance companies the power to cancel policies that include sinkhole coverage and to refuse to include such coverage for homes that may be at risk. Equally troubling is the fact the sinkhole bill was moved quickly through the General Assembly with little or no debate until it reached the floor of the House and Senate.
This is a very important issue to property owners in Northeast Tennessee. Just ask Unicoi County officials who were forced to close Love Chapel Elementary School in 2012 after a large sinkhole was found on school grounds. Just eight months before that discovery, a large sinkhole opened up under a swimming pool at a house near the school.
Sinkholes form when water erodes rock under the surface of the earth. Geography plays a part in where sinkholes appear, and they are frequently linked with karst landscapes.
Generally, if one sinkhole is discovered in an area there are more to be found. This makes sinkhole coverage a vital part of a homeowner’s insurance policy in many areas of our region.
Supporters of the bill passed by the General Assembly this week claim fraud makes the changes to sinkhole coverage necessary. Even so, proponents failed to offer any evidence to support their argument. This bill sounds like a cozy industry-backed solution to a problem that doesn’t truly exist.