TALLAHASSEE — Environmental and tea party groups stood behind Sen. Alan Hays, R-Umatilla, on Friday to promote a Citizens Property Insurance reform bill that would prohibit the state-run insurer from writing policies for new construction or renovations along Florida's storm-vulnerable coasts.
Backers say the provision does two things: protects environmentally sensitive land from development by making it difficult to get property insurance and reduces financial risk to the taxpayer-backed insurer.
"This is a place where conservation and good economic sense come together," said Manley Fuller, president of the Florida Wildlife Federation.
But Hays' bill also would allow Citizens to increase its rates up to 25 percent a year, loosening the current 10 percent annual cap on premium increases. And it would prohibit Citizens from covering homes in non-high-risk areas with a replacement value greater than $500,000, as well as tighten eligibility requirements so people could enter the program only if the other policies they find cost 25 percent more than Citizens.
"This will be devastating to the Tampa Bay area," said Sen. Mike Fasano, R-New Port Richey. "We already have one of the highest foreclosure rates in the country. The forced increase will only add to the economic hardship on many families struggling today. It's interesting they call it a rate increase when in reality it's a tax increase because the Florida Legislature would be mandating the increase."
Reforming Citizens is a top priority of Gov. Rick Scott and legislative leaders this session.
Citizens officials have been warning its premiums aren't high enough to cover losses it would incur if several small storms or one massive storm hits the state.
As private insurers left Florida 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.
Financial reports show if a 1-in-100-year storm hits, Citizens would face an $11 billion shortfall in covering losses. Taxpayers would have to pick up that tab.
Hays said his ultimate goal is to shrink Citizens to nothing.
"The state of Florida has no business being in the property insurance business, period," he said.
While his proposal would help the agency become more solvent and limit new policies, it doesn't shrink it much. According to a spokeswoman for Citizens, only about 4,957 policy holders would be affected by the ban on some homes worth more than $500,000.
Janet Zink can be reached at email@example.com or (850) 224-7263.