Next week is the first anniversary of the worst hurricane season Florida has seen. As we brace for what could be another terrible season, many of us are wondering how high our insurance cost will rise.
The insurer of last resort, Citizens Property Insurance, needs more money to pay its bills and that could lead to higher rates for everyone in the state, but gubernatorial politics may be causing delays.
Hurricanes in Florida have leveled homes and created a $515 million deficit at the “insurer of last resort.” Despite the debt, Citizens Property Insurance has not passed on its losses to other insurance companies as required by law. To make ends meet, it is still paying last year’s claims with money from this year’s premiums.
Justin Glover is a spokesman for the state sponsored insurance company.
“We’re paying claims from a surplus absolutely.”
Question: “Shouldn’t the board have already assessed increases.”
Glover answer: “The board decided to delay a decision on that assessment until the new board was in place.”
That board was supposed to be named by August 1, but Florida Chief Financial Officer Tom Gallagher still hasn’t named his two appointees. Neither has Gov. Jeb Bush.
Florida homeowners will eventually have to cover the loss. The question is when.
Jeff Grady, President of the Florida Association of Insurance Agents, says it’s just not politically popular to raise rates.
“Certainly politicians don’t want to pass along steep increases while they can avoid it and shift it around a little bit.”
With experts predicting more hurricanes this season Grady says Citizens needs to act quickly and address the tough issue of assessing increases.