The spotlight is on Florida’s part-time residents at the moment, as their home insurance in particular is expected to skyrocket even more than that of people who are permanent residents of the state.
Regardless of whether part-time residents live in condos or houses, the rates are heading to the moon.
Citizens Insurance – the state home insurance of last resort – has asked regulators for permission to increase the rates of seasonal residents by 50 percent. This is even higher than the skyrocketing rates expected to be paid by year-round residents.
Florida Senator Jonathan Martin underscored that in 2008, former Governor Charlie Crist designed Citizens to provide residents with a safety net, to ensure that they would be able to obtain coverage even if they can’t find it in the private market.
However, in recent years, due to the increasing frequency and intensity of storms, the state’s industry has been experiencing a crisis in which many insurers have either withdrawn from the state or have gone out of business. As a result, Citizens now has about 1.3 million customers, which is far more than it was ever meant to cover. Should a major storm hit while it is covering that many properties, it could be disastrous for the state.
The home insurance company of last resort is state-backed, and taxpayers provide its backstop.
“The State of Florida taxpayers backstop Citizens. So I think it’s important that we recognize who ultimately is going to pay for any shortcomings from Citizens,” explained Martin.
Citizens has already requested an average 13 percent hike for full-time residents of the state that it covers. Lawmakers have already passed a bill that provides the company with the capacity to hike rates by up to 50 percent for people living in the state less than nine months per year. The company will now need to rely on insurance agents to gauge who is in the state long enough to qualify for the lower rate hike, and who is seasonal enough that they will be hit by as much as double their current home insurance rate.
