|Date:||December 08, 2016|
TALLAHASSEE - Increases in water-damage claims - primarily in South Florida - will likely reverse years of downsizing by the state-backed Citizens Property Insurance, board members were advised Wednesday as they approved an increase in the corporation's operating budget.
Citizens President and CEO Barry Gilway said efforts to shed policies already have slowed and the number of personal-lines accounts handled by the corporation could grow by about 50,000 in 2017, as private insurers shy away from issuing new policies in Miami-Dade and Broward counties, where water-damage losses have grown most rapidly the past few years.
"With this deterioration of the marketplace, and the restrictions that are occurring, and multiple companies backing out of South Florida, we're expecting growth," Gilway said.
Citizens, which as of Friday had 472,207 policies, is expecting at its numbers reaching between 504,000 and 577,000 policies next year.
Last week, Gov. Rick Scott said he'd like Citizens to further downsize to reduce the risk that all property owners could be assessed to cover future storm-damage claims by Citizens policyholders.
"We've got to rely on the private sector," Scott said after an Enterprise Florida meeting at the Hilton Sandestin Beach Golf Resort and Spa. "We've got to make sure that we don't have the risk that there's assessments at the end for homeowners."
Scott, who last week didn't offer any number for how small he'd like to see Citizens, has made the reduction of Citizens a priority since taking office.
Over the past three years, Citizens has shed more than 1 million policies to the private market, a drop that was aided by the fact that Florida hadn't been hit by a hurricane since 2005. That streak ended this year when Hurricane Hermine made landfall south of Tallahassee.
But Gilway said the so-called "depopulation" effort has been slowed in large part by the increases in water-damage claims unrelated to weather issues.
A news release Wednesday from Citizens said water-damage claims and litigation threaten the "corporation's long-term financial stability and will stifle efforts by Citizens to offer premium breaks to policyholders in 2017."
Gilway said Citizens will continue to lobby state lawmakers in 2017 to address the controversial issue of assignment of benefits, where homeowners in need of repairs sign over benefits to contractors, who ultimately pursue payments from insurance companies.