TALLAHASSEE -- As a complex property insurance bill has cruised through the Florida Senate, lawmakers have heard several frightening figures detailing what would happen to the state after a massive hurricane: More than $9 billion in “hurricane taxes,” $100 billion in damages and untold wreckage on family budgets across the state.
Those numbers, mostly inflated, have taken center stage during the debate over SB 1770, but the cost of future premiums to individual property owners, especially “new” Citizens Property Insurance customers, has largely been ignored — until this week.
Insurance bills could soar more than 60 percent under the Senate bill in certain areas of state, including South Florida and Tampa Bay, according to Citizens President Barry Gilway.
“We need rate adequacy in the state,” Gilway said Tuesday, warning that rates need to triple in some areas before they are “actuarially sound.”
It was the first time anyone had publicly discussed the actual size of rate increases required by the 96-page bill, despite several hours of public testimony and five committee hearings. Lawmakers will debate the bill on the Senate floor on Thursday. The House version is made up of several different bills and is still under review.
Insurance rates for a new policy with Citizens could increase by as much as 71.9 percent in Miami-Dade County and 65.6 percent in Broward County if the bill passes in its current form. Some areas would see smaller increases.
The backlash normally sparked by insurance bills with such large rate increases has been non-existent in the debate over SB 1770, which has received bipartisan support. But those large rate increases have never been fully disclosed during debate over the bill.
Supporters say the bill shields current customers from the largest rate hikes, and only new Citizens policyholders would pay the higher rates. But that includes people who get dropped by their insurance companies and forced into Citizens, and people who get dropped by Citizens and need to rejoin.
The bill forces homeowners out of Citizens if a private company is willing to cover their home for 15 percent more than what Citizens is charging. If the private insurer later increases rates at renewal — as several “takeout” companies have done in the past — the homeowner would not be able to go back to Citizens at the previous rate. The homeowner would be considered a “new” customer.
There were more than 130,000 “new” Citizens policies in South Florida and Tampa Bay last year.
With no elections this year, legislators are pushing for more insurance reforms, and SB 1770 could cause insurance rates to go up even faster.
Scott, who faces reelection in 2014 (when many of the rate hikes would kick in), has weighed in, saying that lawmakers should slow down. He wants current customers to be shielded from rate hikes above the current 10-percent cap.
“The governor wants to keep the cost of living low for Florida families while reducing the risk of all home and auto insurance policyholders paying a hurricane tax in the event of a major storm,” said John Tupps, spokesperson for Scott. “Any final legislation the governor signs must meet both of these goals.”
Rather than focus on the numbers that show massive rate increases across the state, the bill’s supporters have highlighted other numbers showing the devastation that would be caused by a once-in-a-lifetime hurricane.