South Florida residents will have their say over the state-backed insurer’s proposed triple-digit increase in sinkhole rates as regulators announced they will hold a public hearing on the issue in Tampa on September 13.
Insurance Commissioner Kevin McCarty said his office will break protocol since most public hearings on proposed rate increases are held in Tallahassee. His decision comes in response to requests from some state officials and members of the Florida Cabinet who have expressed reservations about Citizens proposed 429 percent statewide sinkhole rate increase. Among those protesting the filing is Chief Financial Officer Jeff Atwater, who requested the increase be implemented over several years instead of all at once.
The hearing will be held on September 15, at the Tampa Convention Center, which will be after several consumer groups have their say in public protests. Both the Florida Association for Insurance Reform and the Policyholders of Florida are scheduled to holding a public protest at the Pasco County Government Center in New Port Richey.
Senator Mike Fasano (R- New Port Richey), who has been one of the most vocal opponents of the rate increase, supported the move by regulators to take the public hearing on the road and listen to the concerns of policyholders.
“It is time for our governor, chief financial officer, many of my colleagues in the legislature, and the decision makers at Office of Insurance Regulation to get the measure that people can’t afford the outrageous increase Citizens is seeking,” he said.
Citizens says the big jump in rates is needed. In 2010, the insurer received about $32 million in premiums for sinkhole coverage with ultimate losses and loss-related expenses estimated to total $245 million.
In areas where sinkhole claims have been particularly high, premium increases could be multiplied 20 times or more under the rate proposal.
If approved, the proposed sinkhole rates would affect some 90,000 currently carrying the coverage. The rates would apply over a broad spectrum of the state with the range of increases running from zero percent in Lake County to 2,226 percent in Orange County, which is the main hub of tourism in the state.
Lost in the debate over sinkhole premiums is the other increases sought by Citizens.
Citizens filed for an overall statewide average 25 percent rate hike on multiperil policies and 12 percent for wind-only policies. Out of the insurer’s 1.4 million policyholders, some 400,000 policyholders are covered by wind-only policies.
Current law states that the insurer can only raise its rates by 10 percent, but that does not include surcharges, assessments, and associated policy changes like sinkhole coverage. Renters would see their premiums increase by an average four percent and condominium unit owners by an average nine percent.
Citizens filed for a 429 percent increase in its sinkhole rates. If approved, it could affect some 90,000 policyholders who currently carry the coverage. However, since it is not a mandatory coverage, that number
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