ORLANDO (CBSMiami/NSF) – Governor Rick Scott continued to make his push to depopulate Citizens Insurance Friday in front of a friendly crowd at the Florida Chamber of Commerce.
Scott said he and lawmakers plan to “educate” Floridians on the fact they will be charge assessments if Citizens and the Florida Hurricane Catastrophe Fund are unable to pay claims in the event of a serious storm.
Scott has been pushing to unwind Citizens since he stepped into office. Citizens was originally supposed to be the insurer of last resort, but instead became the state’s largest property insurer as other carriers raised rates to unaffordable levels for most Floridians.
“To make the dream of home ownership available we must reduce the size of Citizens,” Scott said. “It cannot be the insurer of first resort.”
Balancing the actuarial soundness of insurers, including Citizens, with the clamor of the coastal population for affordable insurance has been something Florida policymakers have wrestled with for years.
Following the destructive 2004 and 2005 hurricane seasons, the Legislature placed caps on Citizens premium increases as Floridians complained loudly about spiraling rates. With private companies unable or unwilling to write policies in many areas that a number of homeowners consider affordable, Citizens has stepped in to insure more and more property.
To shore up the market, the CAT fund and Citizens play an increasingly critical role, but are themselves funded in part by potential assessments on policyholders of all companies if they can’t pay losses.
Any proposal to raise those rates beyond the 10-percent cap approved by lawmakers faces intense political pressure from coastal voters, who disproportionately make up Citizens policy base.
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