Advertisement
  1. Archive

State-run insurer may assess fee

Homeowners statewide are facing the likelihood of a special assessment next year to help the state-run insurer of last resort pay claims from Florida's four-hurricane season.

Citizens Property Insurance, the state agency that insures property owners who cannot find coverage on the open market, said it is too early to talk about the likelihood of an assessment. Projected losses might not hold up and Citizens is examining other ways to raise money, spokeswoman Susanne Murphy said.

"Toward the end of the year, we'll be able to determine whether we have a deficit," she added.

Still, the projections are hard to ignore.

On Tuesday, Citizens heard the first official estimate from Risk Modeling Services of how Hurricane Jeanne will affect its high-risk account: a projected $525-million in losses.

Tack that on to projected payouts of nearly $1.3-billion from Hurricanes Charley, Frances and Ivan, and the high-risk account could be on the hook to pay out more than $1.8-billion toward claims.

The agency's high-risk account has about $1.2-billion cash on hand, an amount that swells by roughly $40-million a month as premiums are paid.

If its cash is drained, Citizens likely would issue bonds to pay for damages. Bonds are paid by an assessment on insurers statewide; the insurers, in turn, pass the cost on to property owners.

Some in the industry have speculated about an assessment of 5 percent to 10 percent. But state regulators, like Citizens Property, say that discussion is premature.

With many Floridians expecting to see higher insurance rates next year, Citizens executive director Bob Ricker and other state officials are trying to forestall the pain of an assessment.

"We are discussing ways to potentially use existing financial resources and assess, but at some point down the road, more far removed from the shock of the catastrophe," Murphy said. In any case, she said, there would be no assessment until 2005.

Citizens has more than 800,000 policies, including 440,000 in the high-risk category.

Jeff Harrington can be reached at harringtonsptimes.com or (813) 226-3407.

HURRICANES' TOLL ADDS UP

Citizens Property Insurance is facing a projected loss of $1.8-billion in its high-risk account from 2004's hurricanes. The number of claims is expected to rise, particularly with the more recent storms.

Hurricane Claims Filed+ Total Projected Loss ++

Jeanne 6,852 $525-mil

Ivan 10,003 $220-mil

Frances 42,995 $225-mil

Charley 18,407 $850-mil

TOTAL: 78,257 $1.82-BIL

+ As of Tuesday

++ Eventual projected loss in Citizens' high-risk account.

Source: Citizens Property Insurance Corp.

YOU MIGHT ALSO LIKE

Advertisement
Advertisement