The Pasco County group that formed to fight Citizens Property Insurance Corp.'s soaring rates does not have a good record in Tallahassee.
The last time Homeowners Against Citizens held a rally at the Capitol, lawmakers adopted changes that will result in an average increase of 56 percent for customers of the state-created insurer.
Now the group has a new name, a broader focus and a membership that has swollen to 1,000. Members' singular mission: to reduce all property insurance rates in Florida.
The group, now called Having Affordable Coverage Florida, plans a second bus trip to Tallahassee. The group will rally on the Capitol steps Jan. 16 as lawmakers begin a special session to deal with the property insurance crisis. The demonstrators expect to be joined by groups from Miami and Hernando County.
Pasco group members are tired of what they say is a too-cozy relationship between lawmakers and the property insurance industry, which has reaped record profits as consumers are left with soaring rates and fewer options for coverage.
"We want a seat at the table," said Chris Kowalczyk, vice president of the group. "We are all fed up with it."
Bills Have Skyrocketed
Many Florida homeowners have watched property insurance bills double or triple in the past couple of years as insurers paid out billions in claims from hurricanes in 2004 and 2005. Homeowners in parts of Pasco, Hernando and Pinellas counties have experienced dramatically higher increases, largely the result of millions of dollars paid in sinkhole claims.
At the same time, private insurers have dropped tens of thousands of customers in coastal areas, forcing them to buy coverage with Citizens.
Lawmakers created Citizens to provide insurance for those who cannot get coverage in the private market.
The consumer-backed insurer now has 1.3 million customers, gaining about 15,000 each week. This year, Citizens surpassed State Farm to become the largest insurer in Florida, and it is expected to take on 300,000 more customers next year.
State law requires Citizens to charge the highest rates in the state, so it does not compete with the private market.
Still, Citizens ran a deficit of more than $2 billion after the 2004 and 2005 hurricane seasons, requiring surcharges on all property insurance bills and a $715 million taxpayer bailout.
Citizens' response to criticism about rates is a widely praised plan to make sinkhole coverage optional, which could lower rates by 54 percent in sinkhole-prone areas such as Pasco County.
Under the plan, a Citizens customer would not be paid for a sinkhole claim unless the home is destroyed. Homeowners could opt for complete sinkhole coverage, but at a much higher rate.
Citizens customers have filed 685 sinkhole claims this year, mostly in Pasco, Hernando and Pinellas counties. The claims cost Citizens about $35 million.
Citizens pays $50 in claims for every dollar it collects in premiums in the sinkhole-prone counties, according to the company.
"It's killing us," said Rocky Scott, a Citizens spokesman.
State Sen. Mike Fasano, R-New Port Richey, a key supporter of the plan, said several large lenders have indicated they would allow homeowners to drop sinkhole coverage.
"We've got to do something so people can stay in their homes," he said.
A Different Tactic
Kowalczyk is considering a radical solution to reduce the property tax bill on his 900-square-foot home in Hudson.
In 2000, Kowalczyk paid $800 a year for a private insurer to cover his home. This year he is paying $5,300 for coverage with Citizens.
Kowalczyk might allow his Citizens policy to expire, which would force his mortgage lender to find coverage. His mortgage agreement indicates that he must buy coverage for the home or the lender will provide a policy at a much higher cost than the private market.
He is betting that the lender's policy will be less expensive than Citizens.
"If it's less, I'll take it until this crisis passes," he said.
Steve Schneider, former president of the Florida Association of Mortgage Brokers, said Kowalczyk's idea is innovative.
"If his mortgage lender is in the Midwest somewhere, maybe there is a decent chance his premiums will be less," Schneider said.
Gary Moore can't afford that risk.
Moore paid $45,000 for his home in south Tampa about 10 years ago. For most of those years, he paid $411 annually for property insurance. But his private insurance company dropped him a couple years ago and now he pays $2,085 a year with Citizens. "If it gets any higher, we are going to have to move," said Moore, 52.
For now, he is thinking about joining the group going to Tallahassee.