Lawmakers proposed bills that would raise Citizens Property Insurance policyholders’ premiums by up to 25 percent a year and make many policyholders ineligible for coverage.
State-backed Citizens is Florida’s largest residential insurance provider. The legislation, SB 1714 and HB 1243, filed Friday by Sen. Alan Hays, R-Umatilla, and Rep. Jim Boyd, R-Bradenton, is expected to be one of several proposals aimed at shrinking Citizens and increasing its claims-paying reserves.
In 2009, state legislators lifted a 3-year freeze on Citizens’ rates but capped annual increases for individual policyholders at 10 percent.
The bills filed Friday would:
Allow policyholders’ premiums to rise by up to 25 percent, not including rates for sinkhole coverage or for private catastrophe backup coverage.
Prohibit policies for customers who find coverage from a private insurer that charges up to 25 percent more.
Require Citizens to drop policies covering homes that cost $500,000 or more to replace by 2016. The deadline would be a few years earlier for homes that cost $750,000 or more to rebuild.
Bar Citizens policyholders from hiring public insurance adjusters to represent them in claims disputes.
Require Citizens to consider outsourcing more of its work, similar to state-backed insurers in other states. The insurer would hire a consultant to make recommendations on the costs and benefits of outsourcing, have its board submit a plan to the Cabinet for approval, and start implementing the plan by 2013.
Jeff Grady, president of the Florida Association of Insurance Agents, said recently that outsourcing might be a way to help the insurer lower its overhead and compensation costs.