Florida Legislation Puts Citizens Rates On Ice for One More Year
On Thursday, the Florida Legislature extended the rate freeze on state-run carrier Citizens Property Insurance by one more year until January 1, 2010.
Although homeowners won't see any immediate rate relief, lawmakers hailed the bill's increased consumer protections, such as more notice on cancellations and the ability to sue an insurer if the company doesn't pay an undisputed claim within 90 days.
"What I saw so far looks good," said Gov. Charlie Crist, who is expected to sign the bill.
"Now I'm assured that rates won't increase for another year, especially with the economy the way it is," said Andrea Thompson, who lives in Miami-Dade but owns a second home in Palm Beach County that's insured by Citizens.
If legislators don't address the issue next year, these same policyholders could face steep increases when the freeze is lifted in two years and Citizens is required to pump up its reserves.
As for policyholders of private insurance companies, Sen. Jeff Atwater, a North Palm Beach Republican who helped draft the bill, said he can understand the desire for an immediate rate reduction. But he was driven by a need to make insurers more accountable.
"I've collected close to 500 to 600 stories, from our website, as to what people have been going through and not getting their claims paid. That's what I reacted to," he said.
One positive affects all policyholders: If Citizens runs out of money to pay claims after a major storm, assessments will be about 50 percent lower than they could have been.
The bill, passed by the Senate Thursday afternoon after the House of Representatives approved it around midnight Wednesday, is the product of two weeks of negotiations that intensified in the last three days.
Overall, it's a bill that the insurance industry doesn't like.
Source: Source: Miami Herald | Published on May 2, 2008
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