A coalition of Florida business and consumer groups is objecting to the state-backed property insurer providing coverage for 180,000 individuals who reside outside of the state and, in some cases, the country.
The Stronger Safer Florida Coalition has taken aim at the number of non-resident policyholders insured by Citizens Property Insurance Corp. The coalition says these property owners are subsidized by Florida residents.
Coalition members are pushing lawmakers to end the practice of Citizens providing coverage to non-resident property owners.
“The 2014 legislative session is an opportune time for the Florida Legislature to continue on the path of reform and make changes that eliminate the financial risk associated with allowing non-Floridians to purchase insurance from the state’s ‘insurer of last resort,’” said Tom Feeney, president of the Associated Industries of Florida.
According to statistics provided by Citizens to the American Consumer Institute Center for Citizen Research, the insurer provides coverage to 180,000 policyholders who live outside of the state.
Additionally, the insurer provides coverage to policyholders who live outside of the country in places including Canada, Luxemburg, Chile and China.
American Consumer President Steve Pociask said it is unfair to provide these homeowners with subsidized coverage when they likely have the means to pay for higher coverage in the private market.
The National Association of Realtors found that 90 percent of Canadians pay cash for a second home in Florida.
“Allowing wealthy individuals who own second homes and vacation homes along Florida’s coast to purchase subsidized insurance at a cost to ordinary Florida consumers is unfair,” said Pociask.
Citizens Spokesperson Michael Peliter said the insurer has not taken a position on the issue, which he said is a matter of public policy.
“As a state-created entity, we provide coverage for property owners who need it as provided by statute,” said Peliter.
Lawmakers earlier this year did consider the issue of Citizens providing coverage on non-homestead properties owned by second homeowners and individuals living outside of the state.
At the time, Citizens reported that it had 168,000 policyholders with mailing addresses within the United States, but not in Florida. Also, the insurer had roughly 25,000 policyholders with addresses outside of the country.
Senate Banking and Insurance Chair David Simmons (R-Altamonte Springs) wanted to make those policyholders ineligible for Citizens’ coverage. Later on, some lawmakers advocated that rates on those properties should be based on the highest of the top 20 insurers providing coverage in those territories.
Neither proposal, however, survived the final negotiations over the property bill.