St. Petersburg, Florida - The board of state-backed Citizens Property Insurance has voted unanimously to raise sinkhole coverage rates by as much as 2,000 percent in parts of the Tampa Bay area.
Across the state, rates will go up by an average of nearly 430 percent.
The changes will cost homeowners up to $350 a month more than what they're already paying for sinkhole insurance.
The panel also agreed to seek state approval for increases averaging up to 8.8 percent for non-sinkhole premiums.
Citizens says the increases are necessary because current rates don't cover payouts for sinkhole claims. In 2010, Citizens lost more than $200 million on sinkhole coverage.
A new law, passed this year, allows the company to charge whatever it wants to pay for sinkhole claims.
But many residents in Spring Hill, an area hard-hit by sinkholes, say the rate hike will price them out of carrying sinkhole coverage at all.
And the change won't just affect Citizens customers.
State Sen. Mike Fasano believes that, now that Citizens has passed the rate hike, private insurers will "quickly follow suit."
Citizens rate hikes are also be bad news for people looking to buy or sell their homes, according to some local real estate experts.
"It's going to create problems on the resale side. When a person goes to resell a home and you've got a massive insurance requirement that property, it's definitely going to decrease the appeal of that home to would-be buyers," said Peter Murphy, President of Home Encounter.
A Citizens board voted on the rate hikes Wednesday morning.
Citizens insures more than 1.4 million homes and businesses in Florida.
Final approval will come from state regulators.
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Janie Porter, 10 News