3/3/2012
By: Paul Owers
Sun Sentinel
Citizens
Property Insurance Corp., which covers nearly one of
every four Floridians, has been making some of them very
unhappy.
Last year, the state
Division of Consumer Services fielded 2,025 complaints
mentioning state-run Citizens, a 27 percent increase
from the year before. Complaints that name any other
home insurer in Florida declined by 11 percent over the
same period.
Robin Westcott, the
state's insurance consumer advocate, said she's noticed
escalating tension between Citizens and its customers.
When told their premiums are increasing because of new
priorities from Gov. Rick Scott and Florida lawmakers,
policyholders get particularly upset.
"It's surprise and
complete frustration," Westcott said.
Lane Wright, Scott's
press secretary, said in an email that the governor is
making the tough decision to return Citizens to a
smaller insurer of last resort.
He said critics of a
downsized Citizens shouldn't be angry at the governor.
"No one likes to pay
higher rates. I get that," Wright wrote. "But if people
have angst towards Gov. Scott over the matter ... those
feelings are misdirected. ... They should be upset at
those who kicked the can down the road and refused to
begin addressing a problem that will be financially
devastating to this state if a major hurricane does
hit."
Citizens has been
lowering coverage and raising premiums after Scott
called its power to levy post-storm assessments a threat
to Florida's economy.
All policyholders in the
state may be charged up to 6 percent of their annual
premiums if Citizens lacks money to pay claims after a
storm. Citizens' 1.5 million policyholders would pay
first and could pay the most - up to 45 percent of their
premiums.
The assessments could
cost Citizens policyholders an extra $1,100 each in a
worst-case scenario.
In
a policy address last November, Scott asked the Citizens
board to come up with a goal to reduce Floridians'
exposure.
Complaints about Citizens
started before that meeting, but frustrations have
mounted since then.
Westcott said
policyholders worry Citizens is inflating the
replacement cost of their homes, which raises premiums.
Also drawing their ire is
a program that tightens eligibility for discounts that
Citizens grants for windstorm protection measures, such
as shutters.
In February, those two
concerns led Florida homeowners, including a Pembroke
Pines man, to file separate lawsuits seeking to ban
Citizens from continuing the practices.
Beyond those issues,
Citizens has cut its maximum coverage limit to $1
million from $2 million for homes and condominiums. The
insurer also is raising rates for many high-rise condos
in South Florida by 21 percent. Also, Citizens no longer
offers coverage for such things as awnings, most
carports and screened-in pool enclosures.
The reduction in coverage prompted
Kevin Roth, an Oakland Park homeowner and folk singer,
to write a song last month blasting Citizens and post
the video on YouTube. The song says the insurer is a
"rip-off of the poor" and should change its name to "Citi
Sin."
"There will be a major
outrage after the next storm," Roth, 54, said last week.
"I'm afraid of growing old and not being able to afford
it."
A spokeswoman for
Citizens could not be reached for comment, despite
attempts by phone and email. The Office of Insurance
Regulation said Insurance Commissioner Kevin McCarty was
not available for an interview.
In a statement, Florida
Chief Financial Officer Jeff Atwater declined to address
the rising number of complaints against Citizens. He
said the state must create the conditions that allow the
private sector to compete for insurance policies.
Sen. Mike Fasano, who's active in
insurance issues, said the recent outrage shows the
governor is moving too fast for most homeowners.
Scott's demand that Citizens shrink
is unreasonable because private insurers are still
gun-shy about doing business in Florida, said Fasano,
R-New Port Richey. He added that many private carriers
feel Florida's insurance rates are too low for the risks
they have to assume.
"The private companies aren't writing
policies because they can't charge what they want to
charge," Fasano said. "The governor needs to understand
that you cannot all of a sudden change the rules in the
middle of the game."