FLORIDA RESIDENTS RUSH TO 'LAST RESORT' AS INSURANCE CRISIS DEEPENS
As a potentially devastating hurricane season kicks off, thousands of Florida homeowners have reportedly rushed to get coverage with the state's insurer of last resort, Citizens Property Insurance Corporation.
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The state-backed insurer had a total of 1,211,914 policies as of Friday, according to data available on its website, up from 1,207,292 policies a week earlier.
Despite recent attempts to offload some of them to private insurers, Citizens holds the single largest share of homeowner policies in the state, having massively grown its size in the past year.
The Sunshine State is experiencing an insurance crisis brought about by a combination of factors including excessive litigation, widespread fraud and the increased risk of more frequent and more severe natural disasters linked to climate change.
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The growing risk of increasingly higher damage claims has led several private insurers to cut coverage across the state or leave Florida entirely, leaving many homeowners in the state with limited options for coverage.
Meanwhile, premiums have ballooned to be among the most expensive in the country. Last year, according to the Insurance Information Institute or Triple-I, Florida homeowners paid an average $6,000 per year in home insurance, more than triple the national average.
Citizens, which offers coverage to homeowners who cannot find it in the private market, has grown to a point which has concerned legislators in the state. In late January 2020, the state-backed insurer counted a total of 443,229 policies in force. By December 31, 2023, it had 1,228,718 policies in force in the state.
Earlier this year, the state's Republican Governor Ron DeSantis raised concern about Citizens' ability to handle an extreme weather event, warning that the insurer of last resort is insolvent. "It is not solvent," he said in February of Citizens during an interview with CNBC. "And we can't have millions of people on that because if a storm hits, it's going to cause problems for the state."
Newsweek contacted DeSantis' spokesperson and Citizens for comment by email early on Thursday morning.
Because Citizens is backed by the state, should the insurer go insolvent following an explosion of damage claims, residents will end up shouldering the cost. At the moment, Citizens is not insolvent, as it can meet its financial obligations. Its December 2023 financial report shows that the entity had a $5 billion surplus at the end of last year.
Should this hurricane season be a disastrous one, the situation would become more complicated for Citizens, which would have to rely on financial assistance from the state to pay claims—meaning that all Florida insurance policyholders would likely have to pay more.
Are you a Florida homeowner covered by Citizens? Are you concerned about what's ahead for the state? Contact [email protected] to tell us what you think of the insurance crisis in the Sunshine State.
2024-07-04T10:38:53Z dg43tfdfdgfd
