Citizens Insurance In Peril In Legislature

TALLAHASSEE (CBS4) – State-backed Citizens Property Insurance Corporation has been a lifesaver for Floridians who have been priced out of the market by the large insurance companies. But that will all change under a new provision set to be unveiled in the state legislature next week.

State Senator Alan Hays plans on proposing that Citizens will not cover newly constructed homes in the state’s most hurricane-prone areas. Hays’ proposal will essentially keep Citizens from offering new policies in coastal and high-risk areas of the state.

Without Citizens, the dream of owning a home on the ocean would likely evaporate for all but the wealthiest Floridians. Or, they would have to be willing to live on the coast without any property insurance.

The proposal would also prohibit Citizens after June 1, 2012, from providing coverage to homeowners who remodel existing homes if the fix-up increases the value of their home by 50 percent or more.

According to the News Service of Florida, Hays and other right-wingers are pushing the idea because of their opposition to the state playing a role in the insurance business.

Citizens currently has $400 billion in exposure on coastal regions, but has $4.5 billion in reserves. It puts it roughly on par with some of the too big to fail banks who still don’t have the funds to cover their exposure.

The Hays proposal would be added to a bill that would allow Citizens to hike prices by as much as 25 percent on any single policy. It will also restrict who could purchase insurance from the state-backed insurer.

However, while the new Citizens bill will likely cost Floridians hundreds of thousands of dollars, the legislature is ready to take a hands off approach to letting other insurers set their rates for Floridians. This would leave Floridians to facing the spectre of insurance rates going up by double-digits each year.

Comments

One Comment

  1. Frances says:

    This is outrageous, If the state limits citizens then there will be many people without insurance which if there is a huge storm will be homeless without a way to rebuild, way to go FL!! And they want to be hands off so the few insurance companies here which already charge outrageous amounts can charge what they want??? WOW!! When can we impeach this crazy gov scott who supposedly was going to help get jobs but instead just wants to help big companies and screw everyone in FL that is not a millionaire

  2. tired says:

    GREED, GREED, and MORE GREED!!! Do all republician politicians work for the insurance industry?

    1. Al Merrill says:

      I agree completely, protection rackets were outlawed in the 1920’s, now they are mandatory and called insurance.

    2. Kathryn Harlan says:

      I ALSO AGREE WITH THIS COMMENT.. ENOUGH FOR GOD’S SAKE.. SORRY I OWN A HOME IN FLORIDA!!

  3. Elie Mehu says:

    Again another dose of reality for the floridians.They selected their leaders who turn around and make them pay dearly for their choices. This remind me of the CDD Tax instituted by the legislature of Florida on all developments in the state for a period of 30 years. A strategy for developers to get free moneys from the property owners, and to make matters worse said moneys are collected by local governments. Well done, People of Florida!

  4. DAVID DIPUGLIA says:

    HERE WE GO AGAIN ANOTHER POLITICIAN ON THE TAKE WITH THE INSURANCE INDUSTRY AS HIS EMPLOYER IT AMAZES ME ON HOW THIS SH*T GOES ON WITH OUT ANYBODY STOPPING IT ,ITS HARD ENOUGH TO LIVE HERE WITH TAXES ALONE

  5. Neal says:

    Here we go again, Last fall the OIR allowed Citizens insurance to no write policies on houses with aluminum wires and all the other insurance companies followed suite. Now this…. you watch, after Citizens Insurance no longer writes policies for coastal homes the other big companies will quickly follow.

  6. Marce says:

    Do not blame this on Scott I am in the insurance industry and I am sure everyone knows at least 5 people and they know 5 people and so on and so on and so on that have committed some type of insurance fraud, eg sinkholes,falling objects water damage , auto accidents and the list is endless. So instead of blaming the insurance companies blame all these people that think that insurance companies are personal ATM machines. Someone has to keep reloading this machine with money.

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