Fred Hiers stated that Citizens, which was designed as Florida’s insurer of last resort for homeowners who couldn’t buy insurance any other way, has become the states largest single insurer with 1.3 million clients.
Until this spring, Citizens’ sinkhole insurance hikes were capped at 10 percent. The cap, said Citizens officials, resulted in millions of dollars in losses over the past several years, with Citizens paying more in damages than it collected in premiums.
As part of insurance reform this year, Tallahassee lawmakers passed a controversial bill — SB 408 — that gave Citizens authority to increase sinkhole premiums to cover losses.
“Citizens did in fact take into consideration the provisions of Senate Bill 408 when preparing our sinkhole rate filing,” said Christine Ashburn, director of legislative and external affairs.
The losses warranted the request, Ashburn said, adding that the rate hike proposals were still “on the lower end of the range” of anticipated sinkhole costs.
In comparison to Marion, other counties are facing even higher costs. In coastal Hernando County, annual premiums would jump from the current average of $1,270 to $5,734. Pasco County customers would watch rates jump to $3,598 from the current $1,270.
Sen. Alan Hays, R-Umatilla, who co-sponsored SB 408, said earlier this year it wasn’t sound business to keep sinkhole premiums artificially low by way of the 10 percent cap.
“If they were a private company, the Department of Insurance would have run them out of the state,” he said before the cap was removed. “Insurance premiums have to go up.”
In addition to rates that weren’t sufficient to cover significant losses, Hays said Citizens has forced other insurance carriers to keep rates artificially low.
“Citizens has been competing and holding down the premiums for the other companies. People are not going to buy from ABC insurance company for, say $500, if they can get another policy for $200 or $300,” he said.
As to the potential rate hike’s impact on private insurance rates, Golding said that while other insurers independently set their own rates, they watch the rates that Florida regulators allow other insurers, such as Citizens.
Local independent insurance agent Henry Etheze said that Citizens’ proposed hike shouldn’t surprise customers. Once lawmakers told Citizens to set premium rates to cover costs and lifted the cap, Citizens had to follow the same guidelines in making up losses and building reserves as any other insurer, he said. Also contributing to the problem is that sinkhole claims have become big business, he said.
Once a homeowner reports a sinkhole, the insurer often must pay thousands of dollars for inspections. In many cases, Etheze said, the problem is nothing more than the structure settling, but the situation has become more litigious, and settlements or repairs typically costs tens of thousands of dollars.
“And it’s happened to Citizens too,” Etheze said of claims, many of which are frivolous, he said.
In addition to the removal of Citizens’ sinkhole cap, there also were changes in Florida’s sinkhole insurance laws that could result in discouraging claims.
One example is that if the insurer determines after the initial inspection that there was no sinkhole activity, the policyholder can demand more specific testing by the insurer, but now the policyholder must pay 50 percent of the testing fee or $2,500, whichever is lower. Only if the additional testing shows that damage to the policyholder’s home was due to a sinkhole is the homeowner reimbursed by the insurer.
Etheze said that as sinkhole claims become more expensive for insurers, it’s likely they will press for more ways to save money, including changing insurance laws to no longer mandate offering sinkhole coverage. Currently, only Florida and Tennessee mandate that insurers offer the coverage.
The fact remains until you exclude public adjusters and lawyers from getting involved in questionable claims that are more likely to be normal settlement the cost for such coverage will continue to escalate and at the end of the day, the public adjusters and attorneys are the only ones getting RICH off sinkhole coverage!
The elephant in the room that no one is talking about is even with these modest Citizen Rate increases who will pay for the millions (soon to be billions) of dollars in losses due to sinkhole claims which are enriching the legal community?
Now that we “the People” are dealing with unemployment, economic depression, and on top of that the incompetency of many burocratic members in our government that solved everything approving another rate increase. Instead of doing that they should think in another more effective method of combating the fraudulent claims. By applying the private insurance companies claim analysis system, that decline many of those suspicious claims that affect us all. Create an insurance claim fraud investigation department, to pursuit and prosecute those involved in the crime.
Are the claims statistics public record? How can we know, that all the filed claims are mentioned in this report, were actually settled. Where can we find the information by area or county, per type of claim?
Citizens rate hike can be classified as criminal. They are the only ones right now who is writing homeowners in some areas of Florida so they are getting away with murder. Even though homeowners had inspections done by qualified inspectors Citizens insist that they do one. Once they do one, they increase your policy by an outrageous sum. Where are our political representatives , why can’t homeowners be saved from these greedy people? Again the middle class gets strangled and big companies prospers with no remorse. We need help , someone needs to step in and say enough is enough. When will this greed end . The insurance commissioner is on their sides, that is his job. If they don’t have him then he cannot have that job so he has to go along with their outrageous, merciless plans.
Fred Hiers stated that Citizens, which was designed as Florida’s insurer of last resort for homeowners who couldn’t buy insurance any other way, has become the states largest single insurer with 1.3 million clients.
Until this spring, Citizens’ sinkhole insurance hikes were capped at 10 percent. The cap, said Citizens officials, resulted in millions of dollars in losses over the past several years, with Citizens paying more in damages than it collected in premiums.
As part of insurance reform this year, Tallahassee lawmakers passed a controversial bill — SB 408 — that gave Citizens authority to increase sinkhole premiums to cover losses.
“Citizens did in fact take into consideration the provisions of Senate Bill 408 when preparing our sinkhole rate filing,” said Christine Ashburn, director of legislative and external affairs.
The losses warranted the request, Ashburn said, adding that the rate hike proposals were still “on the lower end of the range” of anticipated sinkhole costs.
In comparison to Marion, other counties are facing even higher costs. In coastal Hernando County, annual premiums would jump from the current average of $1,270 to $5,734. Pasco County customers would watch rates jump to $3,598 from the current $1,270.
Sen. Alan Hays, R-Umatilla, who co-sponsored SB 408, said earlier this year it wasn’t sound business to keep sinkhole premiums artificially low by way of the 10 percent cap.
“If they were a private company, the Department of Insurance would have run them out of the state,” he said before the cap was removed. “Insurance premiums have to go up.”
In addition to rates that weren’t sufficient to cover significant losses, Hays said Citizens has forced other insurance carriers to keep rates artificially low.
“Citizens has been competing and holding down the premiums for the other companies. People are not going to buy from ABC insurance company for, say $500, if they can get another policy for $200 or $300,” he said.
As to the potential rate hike’s impact on private insurance rates, Golding said that while other insurers independently set their own rates, they watch the rates that Florida regulators allow other insurers, such as Citizens.
Local independent insurance agent Henry Etheze said that Citizens’ proposed hike shouldn’t surprise customers. Once lawmakers told Citizens to set premium rates to cover costs and lifted the cap, Citizens had to follow the same guidelines in making up losses and building reserves as any other insurer, he said. Also contributing to the problem is that sinkhole claims have become big business, he said.
Once a homeowner reports a sinkhole, the insurer often must pay thousands of dollars for inspections. In many cases, Etheze said, the problem is nothing more than the structure settling, but the situation has become more litigious, and settlements or repairs typically costs tens of thousands of dollars.
“And it’s happened to Citizens too,” Etheze said of claims, many of which are frivolous, he said.
In addition to the removal of Citizens’ sinkhole cap, there also were changes in Florida’s sinkhole insurance laws that could result in discouraging claims.
One example is that if the insurer determines after the initial inspection that there was no sinkhole activity, the policyholder can demand more specific testing by the insurer, but now the policyholder must pay 50 percent of the testing fee or $2,500, whichever is lower. Only if the additional testing shows that damage to the policyholder’s home was due to a sinkhole is the homeowner reimbursed by the insurer.
Etheze said that as sinkhole claims become more expensive for insurers, it’s likely they will press for more ways to save money, including changing insurance laws to no longer mandate offering sinkhole coverage. Currently, only Florida and Tennessee mandate that insurers offer the coverage.
The fact remains until you exclude public adjusters and lawyers from getting involved in questionable claims that are more likely to be normal settlement the cost for such coverage will continue to escalate and at the end of the day, the public adjusters and attorneys are the only ones getting RICH off sinkhole coverage!
The elephant in the room that no one is talking about is even with these modest Citizen Rate increases who will pay for the millions (soon to be billions) of dollars in losses due to sinkhole claims which are enriching the legal community?
Now that we “the People” are dealing with unemployment, economic depression, and on top of that the incompetency of many burocratic members in our government that solved everything approving another rate increase. Instead of doing that they should think in another more effective method of combating the fraudulent claims. By applying the private insurance companies claim analysis system, that decline many of those suspicious claims that affect us all. Create an insurance claim fraud investigation department, to pursuit and prosecute those involved in the crime.
Are the claims statistics public record? How can we know, that all the filed claims are mentioned in this report, were actually settled. Where can we find the information by area or county, per type of claim?
As always, sure that there will be no answer.
Citizens rate hike can be classified as criminal. They are the only ones right now who is writing homeowners in some areas of Florida so they are getting away with murder. Even though homeowners had inspections done by qualified inspectors Citizens insist that they do one. Once they do one, they increase your policy by an outrageous sum. Where are our political representatives , why can’t homeowners be saved from these greedy people? Again the middle class gets strangled and big companies prospers with no remorse. We need help , someone needs to step in and say enough is enough. When will this greed end . The insurance commissioner is on their sides, that is his job. If they don’t have him then he cannot have that job so he has to go along with their outrageous, merciless plans.