Report: Citizens Considering Uncapping Rates For New Customers
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MIAMI (CBSMiami) – Citizens Property Insurance is continuing its push to eliminate insurance coverage for hundreds of thousands Floridian families just as the 2012 Atlantic hurricane season is set to start.
Citizens’ latest plan would involve uncapping rates for new customers, according to the Miami Herald. That means in some places, including South Florida, some homeowners may end up paying twice as much as their neighbors for the same coverage.
Citizens has repeatedly made claims that it is one major hurricane away from being insolvent, despite having billions in reserve thanks to several years without a hurricane hitting the Sunshine State.
But Citizens has been limited in price increases since the Florida Legislature put into place a 2009 law that caps any rate increases to 10-percent. So, Citizens has been actively trying to find ways around the law, according to the Herald.
Citizens said uncapping rates would bring in about $100 million in additional revenue each year with an average premium increase of 30.5 percent for new customers, according to the Herald.
Florida governor Rick Scott has asked Citizens to find ways to make it more self-sufficient and not have Florida taxpayers be the financial backer of the insurance of last resort for most homeowners.
Citizens has become the largest insurer in the state as private insurance companies left the state in droves rather than insuring some of the most high-risk property in the state. Scott would prefer if most homeowners went to private insurance companies instead of Citizens.
Without significant regulation or cost controls, homeowners are left in the lurch as private insurance companies leave and Citizens continues raising rates for new customers.
(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Miami Herald contributed to this report.)