Citizens Property Insurance is considering putting an end to its storm tax
Florida’s Citizens Property Insurance is considering putting an end to its storm tax, which was first introduced in 2007 as a way for the organization to recover from devastating financial losses. The tax imposed a 1% charge on all homeowners insurance policies that the organization was responsible for. The charge has been somewhat unpopular among homeowners, especially as Citizens continued to raise premiums on their coverage somewhat aggressively. Now, the organization may put an end to the tax two years ahead of schedule.
Citizens may no longer need the storm tax to recover from its financial issues
Jennifer Montero, Chief Financial Officer of Citizens Property Insurance, is supporting the end of the storm tax. She notes that the organization is currently on track to recover from its financial issues. Within the next year, Citizens is expected to satisfy its debt obligations, which is a significant success for the insurance organization considering the losses it has seen from some of Florida’s most devastating natural disasters. The storm tax has helped the organization recover, and it may no longer need the tax in order to become financial stable in the coming years.
Tax helps the organization recover from the majority of its debt
The storm tax alone was able to help Citizens recover $887 million of its $1.7 billion deficit, which was caused by Hurricane Wilma making landfall in Florida in 2005. The state covered the majority of the disaster’s costs, but Citizens was made responsible for the remainder. Other natural disasters placed the organization under financial pressure and threatened its ability to properly manage claims coming from policyholders. State lawmakers had been working to resolve the organization’s issues through legislation, but their efforts have only been met with modest success.
Ending storm tax could help make homeowners insurance less expensive
Ending the storm tax may provide consumers with some relief to their financial stress. Calls to reduce the rate at which homeowners insurance premiums are growing throughout Florida have been loud and frequent, and the cancellation of the storm tax may serve to satisfy the concerns that many consumers in the state have regarding the financial aspects of the insurance policies.