Editorial: Citizens policy holders target of lawmakers

OUR POSITION: Two bills that could pass the Legislature any day now would be a blow to those who use Citizens Property Insurance for their second homes in Florida.

State lawmakers are ready to take a somewhat desperate leap at trying to discard policies covered by Citizens Property Insurance.

Citizens is the state-backed supposed insurer of last resort in the state. It was born out of a need after hurricane damage and other fiscal issues drove some insurers out of the state and homeowners were left scrambling for insurance, especially affordable insurance.

Gov. Ron DeSantis recently suggested Citizens is not "solvent" when discussing the burden the company carries. It started out with a target of 400,000 to 500,000 policies and, before shedding some this past year, reached a high of about 1.4 million policy holders.

The state wants to cut back on that number. To do so, legislators have mandated that any policy holder who gets an offer from a private company that is within 20% of what Citizens is charging, must switch. That was a blow to those who were offered a new policy but nothing like the situation policy holders now might face.

Senate Bill 1716 and House Bill 1503 appear to be headed for a vote this week and if approved it could mean as many as 80,000 people who have second homes in Florida would be affected.

Not only would they face higher premiums but, according to reports, they could find their new insurer faces much less liability.

Up to now, only insurers who were financially healthy could take on Citizens policies. If these two bills pass, it could mean insurers would not have to meet the standards previously guaranteed by the state.

The new company — lumped under a term called surplus lines insurers — could refuse to offer such basic service as guaranteeing it can pay for the loss of the home. That's a pretty standard promise. If you can't have your loss paid for, there doesn't seem to be much reason to have a policy.

Unlike all other insurance companies in the state, the surplus lines companies would not pay into the Florida Insurance Guaranty Association, which is the agency that makes sure your loss is covered.

The bill is sponsored by Sen. Jim Boyd, R-Bradenton, who admits the new company could be riskier. Boyd, an insurance agent, said the new company could, however, turn out to be even more solid financially than the current insurer. And, he said in a Tampa Bay Times story, that none of his policy holders have complained about the possible change.

State regulators would still have to approve the offers and the new company would have to have at least an A- rating.

According to the Times story, the surplus lines insurers would/could write custom policies to cover larger properties than Citizens can take on. That would include homes and property above $1 million

And, legislators would remind us, only second homes would be at risk of being switched. Citizens has about 77,000 second-home policies right now.

Tampa-based Baldwin Risk Partners is the key lobbyist for the change, according to the Times story. Boyd's campaign received $10,000 from Baldwin Risk, but he said he's also heard from other companies about the need for the bill.

The bills may or may not have passed by the time you read this. One thing is certain though. Snowbirds will be heavily impacted if they do pass.