Citizens Property Insurance on the rise?

Citizens Property Insurance is purging current policy holders according to a recent interview with interim CEO of Citizens, Tom Grady, by CBS4.  The report said that Citizens has $6 Billion in reserves but a storm is expected to cost them $22 Billion; hence the purge.  Mr Grady would like Citizens to become the most expensive Insurer in the State – similar to the Louisiana Program.

It seems that Mr Grady has the support of twenty Five State Republicans who issued a letter today in support of higher rates.

The state senators are Jim Boyd, Don Gaetz, Alan Hays, Garrett Richter. Ben Albritton, Dennis Baxley, Jason Brodeur, Daniel Davis, Brad Drake, Eric Eisnaugle, Matt Gaetz, Bill Hager, Mike Horner, Charles McBurney, Larry Metz, Bryan Nelson, Kathleen Passidomo, Scott Plakon, Elizabeth Porter, Stephen Precourt, Lake Ray, Kelli Stargel, John Tobia, Mike Weinstein and Ritch Workman.

Here’s a copy of the letter written to Citizens interim president Tom Grady, who is touring the state looking for ideas to cut the risk for the state-backed property insurance company.

Dear Mr. Grady,

 We want lower homeowner’s insurance rates in Florida. There are so many things we wish were less expensive, including health care and gasoline . But the recent debate about Citizens Insurance rates is not about the cost of the insurance – it’s about who is paying for it. That is why we applaud the current Citizens board for recognizing that the current system is unsustainable, and for working for meaningful reform.

 The purpose of insurance is to cover risk. Within the private market, where most consumers in Florida purchase their insurance, the customers pay for the actual cost to provide that protection – without any government subsidy paid for by the taxpayers of Florida. Not so with Citizens Insurance.

 Adding new customers at subsidized rates is no more than a tax on every Floridian who does not have a Citizens policy – whether they live in central Florida, Miami, or Jacksonville. So the real question here is this: Should a government-created insurer of last resort be offering policies essentially at a loss, while continuing to expand, pushing out private sector insurers, and subsidizing some homeowners at the expense of others?

 We don’t think that’s good public policy. It’s not fair. It’s not fiscally sound. And it certainly does not reflect the core beliefs of a majority of the state Legislature, who passed a law requiring that Citizens become as financially solvent as possible – thus reducing the need to tax all Floridians for future shortfalls in an emergency.

 Citizens Insurance should move toward once again being the insurer of last resort – not the beginning of a government-created single-payer system that supplants the private sector.

 We understand and share the desire for lower homeowner’s insurance rates. However, Floridians who are currently paying full-price for their insurance in the private market don’t deserve to pay a subsidy for those on Citizens. We are greatly encouraged by the board’s desire for reform and its willingness to tackle this very complex and difficult issue. To that end, we urge the board to continue working to eliminate the threat of tax increases on Florida’s families and to bring fairness to the system for all regions of Florida.

Insurance

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