Gov. Scott questions affordability of potential insurance assessments
The question befuddled Lacasa and Citizens officials. State law requires the company to cover new construction and existing homes when selling policies. The insurer, meanwhile, is already asking the state Office of Insurance Regulation for permission to stop insuring new construction sites, known as the "builder's risk."
Scott also asked whether the company should sell policies to homeowners who can't afford the assessments, up to 15 percent of their premium, in the case of a disaster. Floridians with private insurance could face assessments of up to 6 percent of their premiums.
The question struck the heart of an ongoing insurance debate in the state: pay now, or pay later.
If Floridians paid an actuarial sound for their coastal properties, rates would jump 50 percent, Lacasa said, and probably price many homebuyers out of the market. But if homeowners can't afford assessments after a storm, they could lose their home, Scott noted.
Citizens now requires policyholders to sign a form acknowledging they understand the risks. But Scott said the form "doesn't really matter." He wants Citizens officials to poll its policy holders about the risks and return next year with a plan to better explain the risks.
"My concern is people don't have the money and really don't understand the assessment," Scott said.
Citizens has about 1.5 million policy holders, up 50 percent from 2008. The company was created by lawmakers in 2002 to cover homeowners in high-risk areas where the private market refused to sell insurance.