plan would cut homeowner's insurance rates by up to 25 percent
Article Courtesy of The Sun Sentinel
Bushouse, Mark Hollis and Linda Kleind
Published January 18, 2007
TALLAHASSEE · Florida
homeowners insured by private companies could see their property insurance
rates cut 25 percent under a plan Gov. Charlie Crist delivered Wednesday
to the Legislature's emergency session.
The governor floated his proposal as the House and Senate, in a rare
display of bipartisanship, unanimously approved their respective plans to
ease the growing financial burden of property insurance premiums. Those
plans mandate price cuts only for homeowners with policies insured by
Citizens Property Insurance Corp., the state-backed company providing
coverage to anyone who can't buy it from a private insurer.
|Crist lobbied individual
legislators, pushing for a compromise that will give
significant savings to all homeowners slammed with rate hikes
as high as 400 percent after the disastrous hurricane seasons
of 2004 and 2005. He also wants to ban private insurers from
seeking another rate hike for two years.
"The people of the state are screaming [for relief]. They
need it and they deserve it," Crist told reporters.
The governor campaigned last year on the need to deliver
Floridians relief from high insurance prices and has vowed to
veto any legislation that doesn't quickly provide it.
governor is very impressed by what [the Legislature] is doing
but he wants meaningful, broad-based reductions,"
Wahling, of Port Richey, Fla., carries a protest sign as she arrives
at the Florida Capitol to join in the protest over the high cost of
homeowners insurance in Tallahassee, Fla.
LeMieux, Crist's chief of staff.
House and Senate signaled their readiness to repeal a 25 percent rate hike
levied Jan. 1 on homeowners covered by Citizens, which insures about
one-third of the houses and condominiums in South Florida.
When it comes to Floridians who buy coverage from private insurers,
however, legislators have balked at mandating a rate rollback .
Instead, House and Senate leaders say other measures should result in a
drop of between 25 and 40 percent in everyone's homeowner insurance rates.
Most of the savings, leaders contend, would come from the state selling
reinsurance to insurance companies at below-market prices.
Crist's proposalwould require the private insurers by March 1 to show the
state how they are providing 25-percent overall price cuts or a 40-percent
rate reduction for the windstorm portion of premiums, for all
policyholders. Mandating these substantial and immediate rate cuts is the
final ingredient Crist says is missing from the House and Senate packages,
but one he thinks can be part of a final compromise.
"We're very interested in having a soft landing next week," said
Crist, referring to the Monday deadline for legislators to finish the
session. "If we don't, I wouldn't want to be going back home if I
were them. So, I'm confident they'll do the right thing."
Justin Glover, a State Farm spokesman, the largest private insurer in
Florida, said his company would probably oppose any legislation forcing
"We would oppose mandates as anti-free-market and barriers to
allowing new companies writing more [insurance] policies," Glover
Crist was also backing a plan approved by the Senate on Wednesday that
would limit to $22 billion the combined liability of all private insurance
companies doing business in Florida, if a major storm were to hit the
state. Florida taxpayers would then cover up to an additional $23 billion
in losses to insured property.
Senate leaders say a storm causing $45 billion in damage is highly
unlikely, since Hurricane Katrina caused about $40 billion in damage to
insured property and the 2004 and 2005 hurricane seasons combined were
responsible for about $36 billion of losses in Florida. They are also
counting on federal help if losses would exceed $45 billion.
By capping insurers' liability, the Senate assumes more insurers will do
business in the state, and that increased competition and lower rates will
The House is moving closer to the Senate position with a proposaldesigned
in part by Rep. Jack Seiler, D-Wilton Manors, to allow the Florida
Hurricane Catastrophe Fund to expand to almost $30 billion so that more
low-cost back-up insurance is available to private insurers. Unlike the
Senate, however, the House would not have taxpayers reimbursing insurance
claims if storm damage exceeds $20 billion.House Republican leaders
produced documents claiming that the proposal would reduce total
residential property insurance premiums by up to 38 percent.
House and Senate conferees could begin meeting today to iron out
differences and negotiate with Crist..