Florida home insurance market needs reform, lawmakers say
Home insurance companies in Florida are teetering on the precipice of insolvency, and a single large hurricane could bankrupt them
Politicization of the rate-setting process for Florida home insurance coverage has led to dangerously underfunded insurance companies, two lawmakers say.
The largest home insurer in the state is Citizens Property Insurance Corp., a state-run cooperative that provides coverage to homeowners who cannot afford a private policy. Because it’s a government-run entity, though, Citizens’ rates have been set by Florida officials – and some are alleging that Citizens’ rates are too low.
Senator Mike Bennett and Representative Bill Proctor are sponsoring a measure called the Consumer Choice Bill that would encourage new home insurers to offer policies in the state by allowing companies to adjust rates as needed.
In addition, Proctor said to Historic City News, “private market rates must be ‘market based'” and “regulated by consumers.”
At present, the Florida Association of Insurance Agents says, fewer than 75 private carriers write 98 percent of all home policies.
And even though the property-casualty insurance industry enjoyed record profits in 2009, 102 of 210 private insurers in Florida reported losses during 2009’s second quarter.
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Posted: January 26, 2010
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