Citizens delivers blow to wallets with high estimated replacement costs
Ruth Lauro has lived in her tiny New Port Richey home since Jimmy Carter was president. Today, the two-bedroom house is worth little more than the $33,500 she and her late husband paid in 1979.
Yet Citizens Property Insurance Corp. says it would cost $124,000 to replace the house — an amount that is driving up Lauro's costs of ownership to the point she fears she might have to move out.
"Since Citizens took over, it's been impossible to keep up with all the increases,'' says Lauro, who at 82 is actively looking for work. "They shouldn't be doing this to people.''
Like Lauro, many homeowners struggling to make ends meet have been examining their insurance bills and flinching at what they see: higher premiums based on replacement costs that seem way out of line with the property's market value.
Homeowners and one prominent legislative critic accuse state-run Citizens and other insurers of using replacement costs to circumvent rate caps.
"Truly this is a way for Citizens and the private companies to increase rates without having to get approval from the Florida Office of Insurance Regulation,'' says Sen. Mike Fasano, R-New Port Richey.