Florida’s homeowners insurance market continues to pose significant risks
Citizens Property Insurance has been Florida’s last resort for homeowners insurance for several years. Property owners throughout the state rely heavily on the state-run insurance organization in order to receive the coverage they need. The homeowners insurance market in the state has been somewhat turbulent for years due to the disaster prone nature of Florida. Because Citizens Property Insurance accounts for the majority of homeowners insurance policies in the state, it is also liable for the majority of the financial burden that these policies represent. As such, the organization has been faced with significant financial problems for some time.
Law aims to release homeowners insurance policies from Citizens
Florida lawmakers have been working to address the financial issues of Citizens Property Insurance recently, forcing the state-run insurer to shed policies and take steps to better protect itself from the financial risks it faces. Governor Rick Scott has signed a new bill that aims to reform the homeowners insurance organization. The legislation, called Senate Bill 1770, aims to establish a “clearinghouse” for the policies that Citizens is responsible for. Through this clearinghouse, these policies will be removed from Citizens and funneled to private insurance companies.
Policies released from Citizens will enjoy low rates
Citizens is not the only place to find homeowners insurance in Florida, but it is the place to find the least expensive of this coverage. Several private companies offer coverage, but at higher rates in order to better account for the risks they face in a disaster prone market. This is one of the reasons consumers flock to Citizens Property Insurance, but the new law allows former Citizens policyholders to retain the lower rates they had received through Citizens when their policies are taken up by private companies.
Lawmakers aim to make Citizens less of a financial burden on the state
The bill itself is not expected to solve the full breadth of the problems that Citizens faces. Depopulating the homeowners insurance organization of its high-risk policies has been considered a viable way to provide it with some financial relief, however. The ultimate goal is to make the insurance organization less of a financial burden on the state without creating too many problems for consumers.