Lobbyists Propose 10 Percent Property Insurance Rate Hike
In Florida, the battle for funding for state-provided property insurance has resulted in lobbyists pushing for a 10 percent across-the-board rate increase. The increase requests comes from insistence that Florida insurance regulators are failing in their duties to ensure the proper funds sit in an insurance fund in the event that a major wind storm does more damage to the already vulnerable area.
Citizens Property Insurance Corporation is a state-backed insurance provider, it was created through a 2002 legislation to help Florida homeowners obtain affordable coverage that were not covered by private insurers. However, the insurance provider, which also maintains the Hurricane Catastrophe Fund, has had a difficult time maintaining a reasonable stash of money to pay claims in the event of a new storm because so many have already hit the area. Currently, Citizens has a surplus of $4 billion, which according to lobbyists, is not enough.
There have been a series of debates on ways to finance Citizens, but none have been immensely successful. Now, Barney Bishop III, president of Associated Industries of Florida, is asking lawmakers to impose a 10 percent increase across the board to help finance the fund. He says doing so will add an estimated $211.5 million and help ease the deficit the provider would see if a Category 2 hurricane was to hit the area.
However, members of the Office of Insurance Regulation (OIR) argue that an increase this large would make paying difficult for homeowners, especially when they’re already paying a 1 percent assessment to help fund the Hurricane Catastrophe Fund. Instead, the organization hopes to strike a balance that will both finance the fund and offer reasonable rates to homeowners.
A consensus between the two groups has yet to be obtained.