Florida Homeowner Insurance – A Look At The Proposed Changes

The Florida legislature spent the better part of the weekend discussing (fighting) over changes to property insurance in the state.  The bill will be voted on later today and will need the approval of Governor Crist, who has stated he won’t sign any bill unless it provides substantial savings.  Here is an outline of some of the proposed changes:

Double the coverage provided insurance companies under the Florida Hurricane Catastrophe Fund. 

This will subject all property owners in the state of Florida to massive risk ($70 billion) if the fund is wiped out in multiple years. 

Repeal the Citizen Insurance previously approved rate hikes and freeze any increases for 1 year. 

This will affect a decrease only to those property owners who are currently covered by Citizens. 

Removed the requirement that Citizen’s charge more than the private market. 

In essence, the State of Florida is getting into the insurance business. 

All businesses in Florida unable to find commercial hurricane insurance are eligible for coverage through Citizens Property Insurance. Citizens is allowed to set minimum mitigation requirements for coverage.

So now all Florida property owners are subsidizing the hurricane insurance for any businesses in the State.  

Homeowners can buy a policy without hurricane coverage, if they provide proof that their mortgage lender agrees.

I cannot see any mortage lender allowing a homeowner to “opt out” of hurricane coverage. 

Beginning in 2008, companies that sell home insurance in other states must also offer it in Florida if they wish to do other business here.

I believe this will have the opposite of the intended effect.  Insurance companies will pull out of the state.

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