GOVERNOR CRIST SIGNS INSURANCE BILL
With unyielding pressure from Florida property owners, real estate professionals and groups, Gov. Charlie Crist signed a bill in January that many hope will result in a break for homeowners from increasing property insurance premiums, and promises rate cuts between 10 and 55 percent on their hurricane coverage. South Florida home and condominium owners, who have been paying the highest rates across the state, are expected to see some of the biggest reductions, depending upon where they live and their insurers. Homeowners covered by private insurance, about two out of every three policies in South Florida, could see a wide range of reductions on their hurricane (windstorm) coverage, possibly as high as 55 percent.
Within 30 days, Citizens will have to give the Legislature, the Governor and Cabinet a business plan on how it would offer expanded insurance coverage. The swift and overwhelming passage of this bill is, in large part, due to the consistent and steadfast pressure from homeowners and realtor groups across Florida on government officials over the past year. We thank everyone who took the time to contact their local and state government officials. We will continue to monitor the implementation of this new bill to ensure that the desired results materialize. If not, we will continue to press hard for further reform
Bill highlights include:
The bill instills additional accountability requirements for insurance companies, including higher reserves for "pup companies," prohibition of "cherry picking," an oath of truth in rate filings, temporary suspension of "use and file" and arbitration and expedited payment of claims.
The bill provides consumers with new options for insurance policies including premium installment plans, coverage options that reduce premiums, and discounts for obtaining multiple lines of coverage through the same company.
The bill provides consumers with additional information about the amount of and reasons for their premium costs. Policy renewals will identify the amount as it relates to each assessment authority and explain the amount of premium that is due to rate and/or coverage changes.
The bill creates a 3-year-period during which the CAT Fund retention level will be set as low as $3 billion, and the capacity will be as high as $32 billion. Insurance companies must pass savings associated with the CAT Fund changes to consumers, whether or not they purchase this new coverage.
The bill requires insurance companies to inform homeowners of available means for reducing homeowner costs through mitigation and to account for hurricane mitigation measures when determining rates.
Citizens will no longer be required to charge the highest rates in an area. After a rate freeze for 2007, rates will be required to be actuarially sound.