Florida State lawmakers seek to remake, possibly eliminate, Citizens Property Insurance Insurance Consultant

Florida State lawmakers seek to remake, possibly eliminate, Citizens Property Insurance

Written on April 27, 2011 – 3:14 am | by Sebastian Braim

SAFETY HARBOR, Fla. – Tonja Curry of Safety Harbor is one of nearly one and a half million customers of Citizens Property Insurance — but not by choice.

“There was no body else who would cover me at all” explained Curry. “I could not understand that because I’ve never had any damage.”

Curry joined the ranks of Citizens because the state’s private insurers have been dropping coastal customers in droves, claiming hurricanes and sinkholes are just too risky for the rates they’re allowed to charge.

But state lawmakers are advancing a law that would raise premiums for Citizen’s Insurance by as much as 25% while dropping some policy holders.

Sponsor Alan Hays, a Republican Senator from Umatilla, said Citizens has been undercharging for years.

“They need to be actuarially correct, but right now all we have is premiums that are politically correct and they’re woefully inadequate and this company doesn’t have anywhere near the proper amount of reserves pay their claims” said Hays.

Hays, like many Republicans in Tallahassee, believes it’s wrong for the state to compete against private insurance companies. And the Sarasota Herald Tribune reported that emails and meeting minutes indicate Governor Rick Scott wants to phase Citizens out completely over four years.

Republican Senator Mike Fasano of New Port Richey believes private insurance should blame themselves for the explosive growth of Citizens Property Insurance.

“The bottom line: The insurance companies have neglected their responsibility. They no longer want to write policies in risky areas. So the only alternative to those homeowners, to those business owners is Citizens,” said Fasano.

Fasano worries homeowners like Tonja Curry will have no alternative but to go to an unregulated so called surplus line insurance company.

“They’re out of state companies. They could raise rates ad nauseam without any approval from anyone and it’ll hit the little guy and gal, the condo owner, the mobile home owner, the single family home and every business person along the coast.”

The bill to raise rates for Citizens policy holders had not come up for a key committee vote as of early Monday evening, but the Governor’s office did provide this statement in answer to the question of whether Scott plans to phase Citizen’s Insurance out of existence.

“Governor Scott is committed to making Citizens the insurer of last resort. With the position we’re in now, Florida taxpayers would be on the hook for a major storm or hurricane. That’s not acceptable. The Legislature is still considering ways to fix this issue, but the governor has always been clear; he wants a vibrant, competitive private insurance market.”

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