Citizens Insurance is at it again
I recently said to a co-worker that in the newspaper business every rule has an exception, and all rules are meant to be broken or words to that effect. Well I’m sorry to say that I’m breaking my own self imposed rule to never write about the same topic two weeks in a row, but since the subject matter is one of the most important to all Florida homeowners, I’m giving myself a pass.
Last week was all about the low interest loan program that Citizens Insurance is proposing to offer to private insurance companies who agreed to write insurance for current Citizens policyholders. After the incoming house speaker Rep. Will Weatherford wrote a letter to the Citizens Board questioning the board’s authority to implement the loan program, Citizens agreed to slow down the process and bring in a third party firm to review the program. It did not, however, agree to put the program on hold until the Florida Legislature has the opportunity to hold hearings about the loan program and still plans on approving the program in December.
This week is all about the double digit rate hike that insurance regulators have approved for Citizens policyholders. State wide the rate hikes range between 9 percent and 22 percent averaging 11 percent. Manatee County homeowners will probably incur rates higher than the statewide average because of its coastal location. It’s reported that statewide the anticipated average increase for homeowners will be $250, but in Manatee County those averages can go as high as $1,500.
As previously stated, this is an ongoing program to shed policies from Citizens by making rates less and less attractive. Citizens has also been using back door tactics to discourage homeowners and increase rates by disallowing structures like pool cages and car ports. On Oct. 1, letters started going out to Citizens homeowners switching them to private insurance companies. These homeowners have until Nov. 6 to opt out of the new company and remain with Citizens.
The Insurance Commissioner Kevin McCarty said the approved rates represent a reasonable approach. He went on to say, “Our primary goal is to ensure Citizens policyholders are treated fairly and retain an opportunity to return back to a robust private insurance market as the Florida Legislature intended.”
The Citizens’ board keeps reminding everyone in the state that Citizens Insurance was established as the insurer of last resort and was never intended to be a permanent replacement to private insurance. According to them and other state leaders, Citizens now represents a huge financial risk to the average Floridian because the company can levy taxes on insurance policies statewide if it runs short of cash to pay claims after a major disaster.
That being said, in a state that is just starting to turn around economically and where real estate markets are just starting to level off, it would be a disservice to everyone if increasing insurance rates brought the recovery to a screeching halt.
I haven’t quite figured out yet if Citizens’ agenda of depopulating its insurance rolls is really doing a service to the state as a whole, which is what it contends, or if there is something more going on. Either way it looks like Citizens is moving forward with or without approval from the Florida legislature or Florida homeowners. I guess I’m not the only one breaking a few rules.