Florida homeowners are likely breathing a sigh of relief now that another hurricane season has nearly come and gone without a major storm hitting the state, but some property insurance policyholders could see their wind protection swept away next year.
The board of governors for Citizens Property Insurance Corp., the state-owned insurance provider, voted unanimously Monday to reduce its territory for high-risk accounts in order to meet benchmarks set in 2000. The move was required to reduce Citizens risk and remain in compliance with state statutes, and the corporation estimates that most of those affected will opt to buy a different policy with Citizens.
The line marking the high-risk areas will be moved closer to the coast, affecting high-density coastal areas the most. According to Citizens estimates, about 195,000 wind-only policies -- nearly 70 percent of all Citizens wind-only policies in the state -- will not be renewed. Palm Beach, Broward and Miami-Dade counties will be the most affected as the high-risk boundary will be moved from just east of I-95 to east of the Intracoastal Waterway.
The high-risk territory reduction decreases Citizens liability for high-risk accounts from $8.8 billion to $4.7 billion. Non-renewal letters will not be sent to policyholders until mid-2011 and the high-risk account territory reduction won't be effective until 2012.
Citizens estimates that 75 to 90 percent of those affected by the reduction will buy different policies with the state-owned company. Yet, whether affected policyholders stay with Citizens or wade into the commercial market, they will almost certainly pay higher rates.
Even though insurance was not a big issue for most candidates campaigns during election season, Citizens board members are aware that the Legislature is turning over in Tallahassee next week.
You know, were going to have a whole new set of legislators coming up here, it might be a good idea to let them know how this (the reduction in high-risk accounts territory) is going to impact everything, said Citizens staff member Paul Palombo.
Likely to be included in discussions with incoming lawmakers will be the recent decision by the Florida Office of Insurance Regulation to grant Citizens request for a rate hike. In September, the OIR approved an average rate increase of 10.3 percent statewide. Citizens had requested a 9.7 percent hike.
Reach Gray Rohrer at sunshinestatenews.com or at (850) 727-0859.