Proposed insurance bill could hike property insurance rates by over 60 percent
New Citizens customers to be hit the hardest
9:10 PM, Apr 11, 2013
8:48 AM, Apr 12, 2013
TAMPA - It's been lucky that we've gone seven years without a hurricane hitting our state. But homeowners forced into the State's insurance of last resort, "Citizens" aren't feeling so lucky.
Premiums have been rising by up to 10 percent for the last three years and now an insurance bill in the works in Tallahassee could hike rates for some homeowners in South Florida and the Tampa Bay area by over 60 percent.
Senate Bill 1770 is intended to head off a financial crisis that could follow a natural disaster should Citizens be unable to cover the cost of the damage.
"Citizens is not charging enough to reflect the risk it has on it's books," said Lynne McChristian of the Insurance Information Institute.
That may sound outrageous to Citizens customers who have already seen rates go up sharply in recent years, but McChristian backs up the supporters of the bill who say one major hurricane could bankrupt Citizens forcing it to levy huge assessments against every homeowner in the state.
Representative Mike Fasano doesn't buy that.
"That is nothing more than a scare tactic. "Even the CEO/ President of Citizens said that they have the capability of taking care of an 'Andrew' which is a storm every 50 years," said the Republican lawmaker from New Port Richey.
Fasano argues that such a sharp rate increase could cause fixed income seniors to lose their homes and prevent young buyers from qualifying for a loan. McChristian frames it as medicine we need to hold our nose and take.
"To be practical is to make the decisions right now which may seem hard, but when the storm hits, they'll be very smart because the money will be there when you need it to pay those claims," said McChristian.