A bill that would increase rates for Citizens Property Insurance policy holders by up to 25 percent a year and gradually eliminate coverage for some homes valued at more than $500,000 was approved by the Senate Banking and Insurance committee on Tuesday. The bill also tightens eligibility requirements so people could only enter the program if the only policies they can find cost 25 percent more than Citizens.
"I don't want to increase the premiums for anybody," said Alan Hays, R-Umatilla, the sponsor of SB 1714. "But we absolutely must."
Citizens officials have been warning its premiums aren't high enough to cover losses incurred if a 1-in-100-year storm hits the state. Meanwhile, as private insurers left the state in the wake of the busy 2004 and 2005 storm seasons, the number of Citizens policies has swelled from 820,000 in 2003 to nearly 1.3 million.
Sen. Mike Fasano, R-New Port Richey, voted against the bill, saying it amounts to a tax. Citizens is supposed to provide property insurance for people who can't find it elsewhere, or can't afford private market rates. "Give these people some relief," he urged.
Sen. Gwen Margolis, D-Miami, argued that the bill strikes a blow to the already struggling real estate market. Homes won't be sold, she said, because owners won't be able to get property insurance.
"The cost of insurance is just too high and we are not going to get new residents in Florida as a result," she said.
The bill has one more committee stop before it hits the Senate floor. The House companion bill, sponsored by Rep. Jim Boyd, R-Bradenton, is set for its first hearing on Wednesday.