TALLAHASSEE ? On the eve of a Senate vote to dramatically overhaul Citizens? Property Insurance by letting rates go up and trying to shift more policies to the private market, consumer advocate came out against the bill essentially saying the bad outweighed the good.
?Unfortunately, we think the final produce is very damaging and unnecessary,? said Jay Neal, head of Florida Association of Insurance Reform.
The bill, SB 1770, is up for a Senate vote tomorrow.
Among other things, the bill keeps existing customers under an annual 10 percent increase cap, but would let the company charge new customers rates more consistent with the market. It would also establish a clearinghouse that would try to find private insurers to take Citizens? policies. And it would decrease the number of homes available for Citizens? coverage by saying no homes costing more than $1 million would be eligible, with that number decreasing to $500,000 over a five year period.
State Rep. Mike Fasano, R-New Port Richey, said he was particularly concerned about provisions that would let Citizens raise rates higher for new customers ? including homeowners who were forced to leave Citizens? and then dropped by the private insurer ? because it may make it difficult for them to afford insurance and thus own a home.
It would be an ?economic disaster for our real estate industry,? he said.
The measure has been debated and worked on since the beginning of session by Senate Banking and Insurance Chairman David Simmons, R-Altamonte Springs, who like many of his GOP colleagues is trying to simply shrink Citizens?.
Citizens, thought of as the property insurer of last resort for people who can?t otherwise get insurance, has ballooned over the past few years to the state?s largest insurer, covering 1.3 million Floridians. The risk is that if a once in a lifetime storm hit Florida, Citizens may not be able to handle the cost of it and pass it on to other Floridians.
The move to shrink them has largely been supported by the business community.
David Hart, a lobbyist for the Florida Chamber of Commerce, said the chamber generally favors shrinking the insurer as a matter of good business practice.
?It?s not a matter of if we get hit, it?s when we get hit,? he said.
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