FL plans on using socialist model towards insurance premiums (not pictured) – Property Insurance Market – Courtesy: Shutterstock – Image by Alexander Raths
Legislators in Florida are thinking about extending the coverage of additional properties by the state-backed Citizen Property Insurance to address the state’s insurance crisis, as about 15 significant insurers have left the state in recent years.
According to research from the Insurance Information Institute, the cost of home insurance has skyrocketed in the Sunshine State in recent years. As of 2023, Floridians will pay the highest rate in the whole nation, with an average of $6,000. Triple I claims that in just the last three years, insurance costs have increased by 102 percent.
An already dire situation has been made worse by the fact that multiple insurance firms have left Florida due to the state’s rising population, increased frequency of catastrophic weather events, and volume of claims.
In recent months, there has been an increasing number of calls for Florida Governor Ron DeSantis and state lawmakers to take action to address the growing situation. A representative for DeSantis previously told Newsweek that while the Republican had taken steps to lower rates for Florida residents, the effects of his actions would not be felt right away.
DeSantis introduced a draft budget in December that included a reduction in property insurance taxes. On Monday, Newsweek sent an email requesting a response from DeSantis’s representative.
At the commencement of the legislative session in Tallahassee on Tuesday, lawmakers from Florida pledged to address the situation by proposing several policies that would often be associated with a socialist welfare state.
According to Tampa television station FOX 13, among the remedies put up in prior legislations were cutting reinsurance prices, providing direct subsidies to struggling policyholders, and—most importantly—allowing the non-profit Citizen Property Insurance to insure additional properties.
Even though the organization is typically thought of as an insurer of the last option, the action would assist homeowners who were left without coverage due to the withdrawal of private insurers. Only after a homeowner is turned down for coverage by a private insurance provider does Citizen Property Insurance intervene. Approximately 1.3 million Florida policyholders are currently covered by it.
Both Senator Ana Maria Rodriguez and Representative Jim Mooney, two Republicans, supported the notion of increasing the coverage of Citizen Property Insurance, even though many of these proposals—the majority of which were put up by Democrats—had previously been blocked by Republican lawmakers.
The two legislators from South Florida are suggesting raising the maximum amount of home values in Monroe and Miami-Dade counties that Citizen Property Insurance will pay for. The state-run insurer may insure residences worth up to $1.5 million instead of the current $1 million, under their proposed measure. The two counties’ annual rate hikes would be limited to 10%.
However, the suggestion for a remedy coincides with the announcement by the U.S. Senate Budget Committee that it will begin looking into whether Citizen Property Insurance has sufficient money to cover an increase in damage claims that may result from future extreme weather disasters.
The fear is that millions of Floridian policyholders may have to pay more due to an insolvent Citizen Property Insurance, even if their coverage is provided by other private companies—something that is allowed by state law.
Senator Sheldon Whitehouse, a Democrat from Rhode Island and the chair of the committee expressed concern that if a financially troubled Florida turns to the federal government for emergency aid, it will hurt all American taxpayers, according to CNN Business.
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Chris began his writing as a hobby while attending Florida Southern College in Lakeland, Florida. Today he and his wife live in the Orlando area with their three children and dog.
