Citizens moves to cap sinkhole rate increase at 50-percent
By James Call
Tallahassee, FL – Citizens Property Insurance Corporation would limit sinkhole premium increases to 50 percent statewide under the latest proposal. Critics say that is still too much. James Call reports hundreds of homeowners plan to protest a public hearing Tuesday on Citizens' request for rate increases.
Citizens is a state created insurer for homeowners who live in regions where private companies refuse to offer insurance policies. Last spring lawmakers lifted a 10 percent cap on premium increases. Initially, homeowners in Hernando County were looking at a three-thousand dollar increase for sinkhole coverage. The latest proposal would see their premiums go up by 700 dollars. Governor Rick Scott supported the effort to require Citizens to charge actuarial sound rates, that is premiums high enough to cover projected losses.
"What we have to make sure is that the rates they are proposing is fair. I mean they do have to be actuarial sound. They have to look at the fact that we did make changes this year so. The uh, it shouldn't be historical information so that is what I am hoping they will do."
The changes the Governor referenced include not only lifting the cap on hikes but also to reduce costs for insurance companies. Some lawmakers question whether Citizens is factoring the cost savings into its rate request. Senator Mike Fasano opposed the bill lifting the cap and now is organizing opposition to any rate hike more than 10 percent. He says the governor is out of touch with the reality facing homeowners in his district which includes Citrus, Hernando, Pasco and Pinellas counties.
"In one sentence he wants to make the state of Florida more affordable. And yet in the next sentence he wants Citizens to raise rates by hundreds of percentages to where its absolutely unaffordable for people to keep their homes in Florida. And the housing industry in Florida that is suffering right now will almost be done away with if what the governor wants is put in place."
Fasano organized three busloads of his constituents to attend a public hearing on Citizens premiums, Tusday in Tampa. Citizens is backed by state government. If it runs out of money everyone with any property or auto insurance policy will pay a surcharge to make up the difference.