citizens hikes insurance rates
As reported by the Miami Herald Citizens, the state run insurance agency, may raise rates in Florida. These issues are so important to homebuyers in Florida that I thought I should highlight some of the more important issues of this article.
Fortunately for Floridians, as the article states, this is an election year: “Citizens Property Insurance voted on Monday to ask state legislators to approve a long list of changes during the upcoming session that starts in January.”
One politician who is not worried about the election year, our Governor Rick Scott, has encouraged this rate hike. Yes, he doesn’t have to face an election year, so that is one reason why he has picked this particular time to force this issue. His affiliation with insurers before he became governor may have sometime to do with it too.
Who will be affected this increase? “nearly 1.5 million policyholders, including many homeowners along the coast.”
Ultimately, the governor wants to dismantle Citizens entirely. Undoubtedly, the governor Scott would also like to charge surcharges for losses as Citizens does: “Citizens has the power to place a surcharge on nearly every insurance bill in the state if it can’t cover its losses.”
What do those at Citizens think about their future? Carlos Lacasa, chairman of the Citizens board and a former state legislator from Miami has seen the writing on the walls of the legislature. Because of the strong conservative majority in Tallahassee, Mr. Lacasa has felt the pressure to contract.
Indeed, according to Lacasa and other members of the Citizens board, lawmakers have tabled
a controversial bill from this past year that would allow Citizens to raise its rates more than 10 percent a year and would make it harder for policyholders to be covered by Citizens.
Right now a homeowner does not qualify for Citizens unless the private insurer policy cost over 15 percent. If those conservative lawmakers enact this law, the rate most be 25 percent higher for the homebuyer to qualify.
How much political will do those lawmakers in Tallahassee have for these types of changes? Not much, it turns out,
Sen. Mike Fasano, R-New Port Richey, said proposed changes to Citizens would not shrink the size of the insurer because private companies don’t want to cover people in places such as the Tampa Bay area where the majority of sinkhole claims have been.
When a conservative calls private insurers “hypocrites” for not “offering coverage to homeowners regardless of what the state does,” it doesn’t seem likely that a law such as this will pass.