Customers of the state-backed Citizens Property Insurance Corp. in Florida will be paying 10 percent more for their property insurance by Jan. 1 under a bill headed to Gov. Charlie Crist.
The Senate passed the bill (HB 1495) on a 32-6 vote Friday a few hours after the House passed an amended version 80-35 following nearly two hours of debate.
The legislation ends the current Citizens’ rate freeze but limits the annual rate increases to no more than 10 percent a year for more than 1 million Citizens’ customers until the company reaches an actuarial level that makes it solvent and able to pay claims in a timely manner.
“It’s better than 20 (percent),” said Crist, who last week endorsed a 5 percent increase on Citizens’ policies. “I’ll have to take a look at it to decide.”
Crist, who is expected to shortly announce whether he’ll seek re-election or run for the U.S. Senate instead, has been relentless in his criticism of rate increase for national commercial insurers.
“Whenever you vote for rate increases it takes some political courage,” said Sam Miller, executive director of the industry group Florida Insurance Council. “It was absolutely necessary to make sure that we can handle the next big hurricane.”
The bill’s supporters said Citizens’ rates would have skyrocketed by as much as 55 percent by Jan. 1 without the legislation that instead phases in the increase over several years.
The goal of the legislation was to shore up Citizens’ solvency and reduce the state’s $20 billion exposure on the Florida Hurricane Catastrophe Fund by phasing out upper levels of a state-supported insurance backup pool by $2 billion a year until its eliminated in six years.
Lawmakers stripped a provision that would have provided an estimated $30 million for the popular My Florida Safe Home program that offers incentives for homeowners to strengthen their homes with hurricane-resistant windows and doors.
The House and Senate also gave final approval to another property insurance bill (HB 1711) that would loosen pricing regulation for large, national, well-capitalized property insurers such as State Farm and Allstate. This measure has been opposed by the state’s insurance regulator and observers consider it unlikely Crist will sign it.
Finally, lawmakers also sent Crist a bill that would prohibit municipalities from charging residents involved in accidents for emergency response services.
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