The board of directors of Citizens Property Insurance will vote Friday in Miami on two measures. If passed, the measures will cause irrevocable harm to homeowners throughout Florida and further damage our weakened real-estate market. The first proposal would limit nonflood-water damage claims to $15,000, a ridiculously low amount that would leave homeowners who sustain damage from a water leak or broken pipe on the hook for the cost of repairs over the limit — potentially tens of thousands of dollars.
Homeowners who are required to have full insurance coverage by their mortgage companies would also face the prospect of being slapped with force-place insurance to cover the gap in coverage, at four times or five times the cost of regular insurance. Eventually, all Florida policyholders will face the same fate, because as Citizens goes so will the private carriers.
The second proposal would remove the 10-percent annual rate increase limit imposed by the Legislature for new Citizens policies. New homebuyers throughout the state would be faced with the prospect of paying between 50 percent and 90 percent higher rates for property insurance policies, a reality that would devastate the residential real estate market. Good luck selling your home in such an environment.
What is driving these reckless and damaging proposals? The drum beat of political pressure and rhetoric designed to convince Floridians throughout the state that they are subsidizing the insurance rates of South Florida homeowners. The problem is that it just isn’t so. In fact, the reverse is true.
The three counties of South Florida have better building codes, higher property values and much higher insurance rates already and as a result will pay the bulk of any assessments that would result from the feared one-in-hundred-year hurricane. Consider this: Of the 12 named hurricanes that struck Florida since 1994, only one, Wilma, affected only South Florida counties. The remaining 11 storms struck northern Florida counties by a ratio of more than four to one.
Florida has a property insurance crisis. We do need to attract private risk capital back into the state and reduce the size of Citizens. However, the reality is, until we can attract such capital, many Citizens policyholders have no other choice for property insurance. Putting them in the crosshairs because of a political agenda is not the answer.
State Rep. Frank Artiles, District 119, Miami