Reform of Citizens Property Insurance marches on
The House Insurance and Banking subcommittee on Wednesday voted in support of a bill intended to shrink the state-run property insurer.
"We now have the chance to get Citizens back to the market of last resort, which is what Citizens was intended to be to begin with," Rep. Jim Boyd, R-Bradenton, the sponsor of HB1243, told the panel. "There's a big opportunity to get private capital back."
Among other things, the bill would increase rates for Citizens Property Insurance policy holders by up to 25 percent a year and gradually eliminate coverage for some homes valued at more than $500,000. It also tightens eligibility requirements so people could only enter the program if the only policies they can find cost 25 percent more than Citizens. A similar bill passed the Senate Banking and Insurance committee on Tuesday.
Citizens officials have been warning its premiums aren't high enough to cover losses incurred if a 1-in-100-year storm hits the state. Meanwhile, as private insurers left the state in the wake of the busy 2004 and 2005 storm seasons, the number of Citizens policies has swelled from 820,000 in 2003 to nearly 1.3 million. Meanwhile, private insurers say they can't compete with Citizens' low rates.
The proposal, though, has some critics. Heather Carruthers, mayor of Monroe County, which includes the Florida Keys, worried the rate increases would be too much of a financial burden on the people who rely on Citizens.
"These are the teachers, the nurses, the people who bring you your food when you visit," she said.
Rep. Janet Cruz, D-Tampa, was among those to vote against the bill.
"We should not be in the business of insuring homes or businesses. But that's where we are," she said. "I just worry about the rates and the rate hikes that we're imposing."