(The Center Square) — Florida lawmakers have advanced new legislation that would safeguard Floridians from being shut out from the property insurance market by raising the cap on the state’s last-resort insurer.
Senate Bill 1106 is sponsored by state Sen. Ed Hooper, R-Palm Harbor, and would revise certain minimum replacement costs ineligible for coverage by the Citizens Property Insurance Corporation. The bill would provide exceptions to rate increase limitations on single policies issued by the corporation.
In the bill’s text, it states the Legislature has found that private insurance companies are either unwilling or unable to provide affordable property insurance to the extent that it is needed. This poses a threat to public health, safety and welfare and threatens the economic stability of the state.
Bill sponsor Hooper said while introducing his bill to the Senate Appropriations Committee on Agriculture, Environment, and General Government that the purpose of the bill is to offer a safeguard for policyholders.
“The purpose of this good bill is to allow a safe harbor for policyholders to find a market for homeowners insurance when aging out of the current $700,000 Citizens cap that we set ten years ago without disrupting or competing with the private admitted market,” Hooper said.
Hooper noted the cost of inflation over the past few years has pushed up insurance costs and increased home prices. This includes Florida’s property market where home prices have continued to grow, partly driven by the Sunshine State’s booming population as it has become the fastest-growing state in the nation.
“Inflation has run many average middle-class homes over $700,000 and there’s difficulties placing these risks in the admitted market,” Hooper said. “Policies over $700,000 would not be subject to the current Citizen’s guide slope that the rest of us enjoy. Indeed the rates must be actuarially sound, and not competitive with the private admitted markets.”
Hooper said that policyholders receiving an offer from an admitted insurance carrier would be ineligible for coverage from Citizens, regardless of the price. The bill would also roll out a Citizen’s take-out program to refer risk-based business back to private carriers.
“This is a bill of last resort,” Hooper said. “If you own a home that is more than $700,000 and less than $1 million, this is an opportunity for you to be covered by Citizens if there is no other admitted market opportunity.”
