TALLAHASSEE (CBS4) – A proposal targeting Citizens Property Insurance Corporation has passed its first Florida Senate hurdle. The bill would raise premiums and limit the types of policies the state-run insurer can issue.
According to the News Service of Florida, the bill passed on a 6-4 vote, but not before very heated debate was exchanged over Florida’s largest single property insurer.
Currently, Citizens has roughly 1.3 million homeowners policies in the Sunshine State.
Backers of the bill said the rate hikes are needed to cover the risks carried by the company. Republican state Senator Alan Hays said the bill also is based on levying assessments on most insurance customers. Hays compared that to socialism and said it would ultimately fail.
But critics of the bill said that coastal residents live in areas where private insurers won’t got and even if they did, the private insurers would charge rates many property owners couldn’t afford.
In addition to the rate hikes that could reach up to 25 percent a year, the bill would push the value of homes Citizens can insure to $500,000 by 2016. Other elements in the bill included:
- Prohibits the use of public adjusters for Citizens customers
- Prohibit Citizens from offering commercial, non-residential policies
- Restrict sinkhole coverage to the primary residence and not ancillary buildings
Citizens was created in 2002 to cover coastal policyholders no private company would insure. Lawmakers froze Citizens’ rates until January 2010. Rate hikes have been capped at a statewide average of 10 percent.
(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The News Service Of Florida contributed to this report.)