Homeowners insurance in Florida facing major changes due to new legislation
Florida’s Citizens Property Insurance, a state-run organization that offers homeowners insurance coverage throughout the state, has been laboring under the weight of significant financial problems for the past few years. Last year, the state-run company was tasked by Florida lawmakers to make drastic changes to its business structure in order to overcome its financial challenges. The number of policies represented by the insurer and the premiums associated with these policies have been the major focus on this restructuring. A new proposal has been introduced by state lawmakers that could have major implications for homeowners insurance throughout the state.
Legislation aims to reform Citizens Property Insurance
Per the proposed legislation, homeowners insurance rates throughout the state could see a significant increase beginning next year. The legislation is currently being drafted by the Florida Legislature, so many of its provisions have not be finalized. The legislation is, however, being designed to reform Citizens Property Insurance in such a way as to alleviate some of the financial strain the state-run company has been experiencing in recent years.
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Legislation would make homeowners insurance coverage more expensive statewide
One of the provisions of the legislation specifically mandates Citizens Property Insurance charge more for its homeowners insurance coverage, offering rates much higher for this coverage than what can be found in the private market. This particular provision will bar the state-run insurer from pricing its policies to be below the average seen throughout the private market, which could translate into significantly higher homeowners insurance premiums throughout the entirety of the state. The legislation will also allow private companies in the homeowners insurance sector to raise premiums based on an “insurance inflation factor,” which will allow them to raise rates faster than they are currently able to.
State-run insurer continues to struggle with financial problems
Last year, Citizens Property Insurance was tasked by Florida lawmakers to depopulate itself. The insurer has been shedding policies in recent months in an effort to mitigate the financial aspects of claims payouts that it could see in coming years. Private insurers have been picking up the policies that have been shed by the organization.