With the stroke of his pen, Governor Jeb Bush hopes to send a message to the world wide insurance community that Florida is doing its part and the industry should, too.
The legislation hopes to attract more companies to the state by underwriting part of their risk and retrofitting older homes. But don’t look for rates to go anywhere but up.
State Farm is already asking for a 70 percent rate hike. Mobile home insurers are finding it harder to get coverage. Governor Jeb Bush signed a massive 156 page rewrite of the states insurance laws that is almost certain to increase rates in hopes of increasing availability.
Bush told reporters, “I will accept responsibility that we will have higher rates. And I feel horrible for people on fixed incomes, particularly lower income working families that own their home that will have to pay that higher premium. But there’s really no other option right now.”
Citizen’s Property Insurance Company’s rates are expected to double within 18 months. The legislation does spend $715 million to pay off part of the $1.7 billion in losses from last year. That alone spared insurance customers across the state a massive assessment.
Florida’s Chioef Financial Officer Tom Gallagher says at least its better that it was going to be. “Instead of a 20 percent assessment, it’s going to be a lot less because the rest of it will be spread out over a 10 year period. So we’re looking at three or four percent.”
Million dollar homes along the coast will not be covered by the state run insurer after 2008. Second homes will face a 25 percent assessment.
There is also $250 million in the bill to make homes more safe. Homeowners will get free inspections and can then apply for up to a matching $5,000 grant to upgrade the safety of their homes.