Remember when we told you Florida insurance companies were bleeding money and the rush to switch to Citizens Property Insurance Corp. was a concern?
Remember when the state Legislature this year passed a bill aimed at lowering our home insurance rates and raising rates for Citizens (the state-backed insurer of last resort) to dissuade homeowners from changing policies?
Well, the changes aren’t working well.
As of this week, the number of homeowners running to Citizens for coverage swelled to 661,000 policies, according to the insurers’ website. That is up from 638,263 in June and way more than the 486,773 this time last year.
This is happening despite the fact the Legislature allowed Citizens to raise its rates 15%.
The problem is too many private insurers, who lost a ton of money the last five years in Florida, are abandoning the state and Citizens is the target for homeowners looking for the best deal or who have no one else that will insure them. Citizens President and CEO Barry Gilway says he expects the company to be loaded down with 766,000 policies by the end of the year.
And what’s the problem with that?
Well, as Tropical Storm Fred reminded us, the state is vulnerable to hurricanes. And, one real bad one will hit Citizens like a hammer and that means all of us will pay since the state is on the hook for Citizens profits and losses.
There is no easy solution. The Legislature will have to make another attempt next year to remedy the problem and figure out incentives to lure more private insurers to Florida.