CoreMessage

Client News

Amendment would prohibit Citizens Property Insurance from covering near-shore homes

Saturday, March 12, 2011 | Tallahassee Democrat | By: Paul Flemming

What they agree on is that Citizens charges artificially low rates for the high-risk policies and the subsidy encourages development where it shouldn’t, and otherwise might not be.

Sen. Alan Hays, R-Umatilla, intends to offer an amendment to an existing insurance bill that would prohibit Citizens from writing policies on new construction, or remodels of existing structures, seaward of the Coastal Construction Control Line.

“My goal is to depopulate Citizens, to make it as small as we can make it as rapidly as we can,” Hays said.

Hays would also raise the cap on increases for Citizens customers to 25 percent on individual policies.

A current “glide path” of rate increases for Citizens’ 1.2 million homeowners policies is capped at 10 percent. The increases are aimed at making the insurer better able to pay losses and minimize the assessments all insurance consumers could face after big hurricane losses. Hays said Citizens estimates a probable maximum loss of $13.7 billion if a one-in-100-year hurricane makes landfall in Florida.

“We don’t know what bad is until we see that $13.7-billion deficit, and that’s just for one storm,” Hays said.

The 10-percent cap on rate increases was hotly debated when it was instituted two years ago and while it was under review by state regulators. Hays said he’d discussed his legislation with Gov. Rick Scott, whom Hays described as supportive.

The Office of Insurance Regulation “supports the bill in its current form,” said Jack McDermott, director of communications for OIR. Hayes was joined by disparate groups that support the proposal for different reasons.

Manley Fuller, president of the Florida Wildlife Federation, joined Hays in support of his bill at a Friday press conference. Fuller, along with Charles Pattison, president of 1000 Friends of Florida, said the state’s subsidy of insurance costs encourages damaging development in fragile coastal environments. Also on board are fiscal conservatives and small-government advocates.

“Government should not be doing something the private sector does,” said Scott Osteen, director of the Tallahassee Tea Party.

« Return to News