Florida House Bill 1711 increases options on property insurance
By Mary Partington, Guest Columnist
I cannot believe I am going to say this: Gov. Crist, please do not veto HB 1711. The governor just signed the bill to increase Citizens Insurance rates by 10 percent a year and is considering signing HB 1711.
The Consumer Choice Bill HB 1711 will allow 20 insurance companies to issue policies with rates that have not been approved by the state of Florida. The 20 companies are well-known and fall into a group of well-capitalized private companies.
When the governor signed the bill allowing for the increase of the Citizens rates, he recognized that the rates currently charged are insufficient to sustain Citizens. The state of Florida is the entity behind Citizens and we, the taxpayers, are the ones who will pay for the failure of Citizens. The name is apt as we are the company.
The Legislature, debating the bill, admitted that the real rate increase needed is 40 to 50 percent. There is no cap on the number of years that the rates will go up by 10 percent. The governor wanted a 5 percent increase but realized the real need of adequate rates is much larger.
When we were notified we would be losing our current policy with State Farm Insurance, we began the process to look for other coverage.
After the initial outrage over the pending cancellation of our policy, we finally looked at the insurance problem with a better understanding of the condition of homeowners insurance in the state.
Our choices are companies that are relatively new to the market owned by an assortment of owners or the state-run company. Our bottom-line question was, "Who will have the ability to pay the claims if there is a catastrophic hurricane?" If all the major insurance companies who have years of experience have declined to write insurance because of inadequate rates, how are all the new companies going to have enough resources to pay the claims?
If we are hit by a major hurricane season, will these companies fold up and will their policyholders be left to collect from the state? All the premiums paid to these companies will go with them.
Some of the insurance policies written by the newer companies have a clause that limits the amount of hurricane coverage, with the remaining amount of the loss to be paid for by the state. They are admitting in that clause that they will be unable to meet the costs of the claims from a large hurricane.
With the proposed HB 1711, consumers will have a choice to perhaps pay more but feel more comfortable that in case of a major hurricane, the loss will be paid for without years of haggling over payment.
When we compared the coverage in our quote from Citizens to our current policy, we found that the coverage for "loss of use" was much less than our current policy. This is an important coverage in that it pays for the cost of living away from your home for the time the home cannot be inhabited. After Hurricane Andrew, some homeowners were supplied with travel trailers to live in while their homes were repaired.
House Bill 1171 will give us a choice. There will be competition between the 20 major companies. The Legislature and the governor have admitted the rates currently charged are not adequate. We may or may not buy one of these policies, but the American way is all about choice and at least this bill gives us that.
Mary Partington lives in New Port Richey.