Big Bill-and maybe Higher
Rates-Coming Soon on Citizens Property Insurance
1/23/2013
By: Toluse Olorunnipa
The Miami Herald
A massive, multipronged bill to
reform Florida’s property insurance market could be
introduced soon in the Florida Legislature, as
influential committee chairs are determined to shrink
Citizens Insurance and stave off potential “hurricane
taxes.”
Sen. David Simmons, R-Altamonte Springs, said the
Florida Senate and House will work on a major bill to
fix the state’s property insurance market, encompassing
several controversial ideas while trying not to cause
“rate-shock.”
“We’re not going to pull the needle out of the arm of
South Florida in one year,” he said. “We’re talking
about being able to in fact provide a viable alternative
to doing nothing. And that’s critical to us.”
The statement came after the Senate Insurance and
Banking Committee heard testimony from a number of
pro-business groups, state officials and other
stakeholders. Most groups had a similar message: rates
at Citizens are too low and are keeping the private
market from expanding.
The bill to be introduced by the committee would likely
encompass a number of different measures, including
raising rates faster, shrinking the state’s Hurricane
Catastrophe Fund and creating stricter requirements for
homeowners seeking coverage from Citizens.
In a state with relatively high and constantly rising
insurance premiums, passing the reforms—and rate
hikes—envisioned by many of the pro-business groups may
be difficult politically. With 1.3 million policies,
Citizens is the largest insurance company in the state,
and a push to raise its rates further would affect
millions of voters.
In South Florida and other coastal areas where insurance
rates are highest, voting for even higher rates is a
politically risky move. Last year, controversial
property insurance reform measures were defeated when
South Florida Republicans joined with Democrats to vote
down GOP-sponsored legislation.
Some of the presenters at the committee said it would be
more risky to leave Florida taxpayers at risk of paying
“hurricane taxes” after a once-in-a-lifetime type
hurricane.
“It is unfair to continue to require 77 percent of
Florida homeowners to subsidize Citizens policies, in
addition to 100 percent of businesses, charities,
religious institutions, renters, automobile
policyholders, local governments and school boards,”
said Tom Feeney, president of Associated Industries of
Florida, in a statement.
Insurance Consumer Advocate Robin Westcott offered a
plan that did not focus on rate hikes.
She pitched an idea that would call for the state to
invest in strengthening unprotected homes along the
coast, a move that would reduce Citizens exposure by as
much as 20 percent.
“In every study that’s been done since Hurricane Andrew,
we’ve found that the one central thing that has been
brought up has been mitigation,” she said. “Mitigation
reduces risk and really is the only answer.”
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