Fla. Orders Citizens to Insure Residents Charged Unapproved Rates

Florida Insurance Commissioner Kevin McCarty ordered Citizens Property Insurance Corp. to begin offering residential property insurance coverage to Floridians whose policies were taken out of Citizens by private insurers only to be charged unapproved rates.

Under Florida law Citizens is required to charge rates that are higher than rates charged by private insurers. To achieve this, Citizens looks at the rates charged by the 20 largest insurers doing business in the state and sets its rates above the average rate charged by those companies in any territory. However, the companies which have raised rates above Citizens fall below the 20 largest companies and are not part of the calculation to make Citizens rates the highest. In some cases these companies have taken advantage of a provision in Florida law and have begun charging the increased rates prior to having them approved by the insurance commissioner.

“The Citizens takeout provisions which the affected policyholders fall under were written to achieve a good end, however because of unintended consequences these people have been hit with a financial nightmare,” McCarty said. “They were already being charged the highest insurance rates where they live only to see their premiums skyrocket even higher. Clearly this is not what the law intended, but, fortunately, the law does allow the relief I am ordering.”

Florida policyholders are eligible for coverage from Citizens if they are not offered a standard or basic policy including wind coverage at an approved rate by an authorized Florida insurance company [627.351(6)(c)5 F.S].

McCarty said he will recommend statutory changes to lawmakers that will provide a more efficient form of relief to Floridians who are put into similar situations in the future.

Source: www.floir.com

Topics Florida