What Changes are Being Proposed to Citizens Insurance?

The most important change proposed by SB 1770 would allow rates for new policies for Citizens customers to be as much as 60.1% higher in Palm Beach County and 65.6% higher in Broward county. Citizen’s currently insures 133,589 properties in Palm Beach County and 191,092 properties in Broward County.  A recent study which concluded that a “century storm”, with a 1% chance of occurring in any year, could generate a maximum of $21 billion in claims. This study prompted some legislators to review insurance premium caps for Citizens. However, Citizen’s own website states that their “Claims‐Paying Ability” is $19.5 billion.

Senator Sachs’ Position

When asked about her position on the bill, Senator Sachs responded, “We all know Florida has the largest coastline of any state in the country.  With beautiful coastal property, comes high risks of wind storms and flooding.  Recognizing the problems that come with Florida’s unique geography is one thing, but finding a solution to protect home ownership is another. All parties must come together to find an actuarially sound solution to protect all of Florida’s property.  Palm Beach and Broward counties are particularly vulnerable to these changes, where approximately 40% of all properties are insured by Citizens.  Any variations that favor insurance companies over constituents will cause havoc for property owners.  We need to take steps to nurture the growth of our recovering real estate market, not scare away buyers.  These changes would essentially amount to a tax on new property buyers.”

Supporters say the bill shields current customers from the largest rate hikes, and only new Citizens policyholders would pay the higher rates. The problem is people who get dropped by their insurance companies and forced into Citizens, and people who get dropped by Citizens and need to rejoin are considered “new” policyholders. Additionally, the bill forces homeowners out of Citizens if a private company is willing to cover their home for 15 percent more than what Citizens is charging. If the private insurer later increases rates at renewal — as several “takeout” companies have done in the past — the homeowner would not be able to go back to Citizens at the previous rate. The homeowner would be considered a “new” customer.

Senator Sachs would like to hear your opinion on Citizens Insurance.  Please email or call the office to express your opinion.