This would mean higher premiums for approximately 1.5 million policyholders in Florida.
The Citizens Insurance state run company in Florida is surrounded by controversy, while some feel that it is vital to the state and others are just waiting for the bottom to fall out.
The company sells about 1,000 new policies every week, but may be headed toward financial ruin.
Many experts are saying that though it is growing very rapidly, this massive insurer could face disaster if even a single major storm makes its way through the state, leaving the bill for its taxpayers to cover. This insurance news is released as hurricane season 2012 gets into full swing.
Price controls have caused private insurers to step away from this marketplace, but as Citizens Insurance was created and is run by lawmakers in Florida, it has become a last resort form of coverage, instead of the one that kicks in by default.
Now, as the company thinks about boosting their premiums so that the private sector will be able to compete or will at least be able to maintain their current course, almost 1.5 million policyholders will now be facing higher costs. According to Tom Grady, the interim president of the company, this is the only way to avoid complete government control.
Grady explained that “We’re right in the middle of no government and government takeover.” He added that “It’s hard to stay in the middle. I wish gas cost less. I wish health care cost less. I wish education for my children cost less, but the price is the price. Do we pay more now or pay for it later?”
Citizens Insurance recently announced that Barry Gilway will be replacing Grady later in 2012.
Gilway is an insurance exec out of Maryland, was just voted in by the board. On the other hand, Grady will be using his final days in this top position traveling throughout Florida to meet with policyholders, community leaders, and lawmakers, to obtain feedback from these various levels regarding the rate increase that is being considered.
The eight member Citizens Insurance board of directors will be voting on July 27 and will then submit their decision for Florida Office of Insurance and Regulation approval.
Other related article(s) and resources: http://www.bradenton.com/2012/06/18/4081648/citizens-insurance-discusses-raising.html