Florida property owners will stop paying a 1 percent emergency assessment on their insurance bills two years earlier than planned under a recommendation approved Wednesday by the board of Citizens Property Insurance.
For the average homeowner, that translates into a total savings of about $40 over two years.
Citizens was allowed to tack the assessment on to Florida property policies after eight storms during the 2004-05 hurricane seasons left the state-run insurer with a deficit of more than $1.7 billion. The assessments, used to pay off a bond, were supposed to last 10 years.
The emergency assessment began at 1.4 percent in 2007 and was reduced to 1 percent in 2011 because of an increase in the number of insured policies. Continued growth has helped Citizens recoup funds even more quickly than anticipated.
Citizens chief financial officer Jennifer Montero told board members at their monthly meeting in Orlando that the company now expects to have enough money by June 2015 to satisfy the bond's balance. The assessments originally were scheduled to be collected through June 2017.
The average homeowners premium in Florida was $1,933, or roughly twice the national average, according to a report from the National Association of Insurance Commissioners based on 2011 data, the most recent available year. So, a 1 percent assessment added just less than $20 to the average bill.
Citizens' assessments are separate from the emergency assessment imposed to shore up the Florida Hurricane Catastrophe Fund the past eight years. That 1.7 percent assessment on both home and auto policies is now scheduled to end Jan. 1, also earlier than originally expected.
Like dozens of private carriers that offer property coverage, Citizens has enjoyed a string of hurricane-free years since 2005 to bolster its bottom line.
As the state's insurer of last resort, Citizens is allowed to assess all Florida policyholders when it is swamped by claims. That's one of the chief reasons the company has been aggressively trying to shrink by pushing policies back into the private marketplace. From a high of 1.5 million policies in 2012, Citizens expects to be under 850,000 policies by year-end.
Contact Jeff Harrington at (813) 226-3434 or email@example.com. Follow @JeffMHarrington