Florida is in a sinkhole, but that’s not new. What’s new is that Florida politicians are changing rules that will greatly affect our state, and could potentially increase your homeowners’ premiums making that sinkhole seem even more dangerous. State Rep. Jim Boyd and Sen. Garrett Richter are leading up a bill through the legislature labeled HB 245 & SB 578. This bill would allow unregulated surplus lines insurers to individually choose which Citizens’ policyholders they want to insure, which, over time, can subject their customers to unlimited future rate hikes and less insurance coverage.
The state of Florida has been grappling with its state-backed insurer, Citizens Property Insurance Corp., for some time now. Its policyholders represent a large share of the market throughout the state, which has resulted in the state insurer getting hit hard after devastating events that have resulted in a tsunami of claims over the years. In an effort to reduce the number of policyholders that Citizens insures, legislation has created a depopulation program by encouraging new or existing private insurance companies to take on Citizens’ policies. But these bills come with plenty of issues and challenges.
If implemented, unregulated surplus lines brokers would have the ability to review Citizens policyholder underwriting and claims information, then individually pick the high-premium policies and issue any rate. In allowing surplus lines carriers, which are not subject to the same state regulation as admitted carriers, to participate, insurance rates will become unregulated leaving Citizens with an even riskier pool of policies. Once a policyholder leaves Citizens, there appears to be no real mechanism for reentry. A surplus lines carrier could renew the policy with higher rates, free from the rate regulation.
Other remedies and solutions to protect homeowners throughout our state need to be offered. Contact your local representative to make sure that our area remains an affordable place to live and work. Newman Crane serves Orlando & Central Florida with both Commercial and Personal insurance lines. Give us a call today. (877) 874-4673