Citizens insurance slammed for rate hikes, coverage changes ...

By Julie Patel and Doreen Hemlock

Lawmakers, policyholders and others criticized Citizens Property Insurance for raising premiums and lowering coverage limits, among other things, at a meeting in Miami Monday.

They said moves proposed by Citizens, the state's largest property insurer with 1.4 million policies, could hurt the whole state and its housing market.

For instance, Citizens' board will consider a proposal next week to increase premiums for new policyholders by more than the 10 percent annual cap currently in place. Citizens board member John Rollins said Monday that he still supports the idea, despite criticism of it by some legislators and policyholders: "I think we should do the option to allow different new business rates than renewal rates."

Citizens President Barry Gilway said it's going to be "a significant balancing act" to follow the overall direction state leaders have provided and minimize the impact on policyholders and all Floridians.

Several lawmakers at the hearing criticized the proposal. Florida House Majority Leader Carlos Lopez-Cantera, R-Miami, said it's "outside the scope and power granted to it by the Legislature." State law says Citizens should increase rates that do "not exceed 10 percent for any single policy issued by the corporation" excluding sinkhole coverage and increases related to coverage changes or surcharges.

Citizens reported the capped average increase for homeowners policies statewide would be less than 8 percent, with some policyholders seeing increases of up to 10 percent. That would generate an additional $173 million in premium. The insurer reported that it actually needs an increase of 27 percent to 34 percent, if it includes "risk load," expenses that would cover unexpected problems that may arise. Without the risk load, the statewide average increase needed is 15 percent, including 51 percent for condo unit owners and 27 percent for renters.

About 50 people attended the meeting, with about 10 offering public comments.

The speakers included James Curry, a Fort Lauderdale property owner and developer. He said home insurance costs are rising so much that they're almost the same as annual property taxes: "It's crazy...You're driving ratepayers out of Florida" and hurting the state's economy.

Oscar Mormeneo, a Miami policy holder, insurance agent, realtor and public adjuster, said he sometimes makes 15 or 20 calls to try to get insurance for himself or clients before ending up at Citizens. If Citizens is reducing coverage and limiting claims, he said, "then why is the premium going up?"

After the meeting, Sean Shaw, a former Florida insurance consumer advocate whose law firm now represents homeowners, said he's hopeful Gilway "can reverse the culture at Citizens away from rate hikes at all costs...Without affordable insurance options in our state, especially for our most vulnerable policyholders, we will never see a full housing recovery."

Updated at 1:30 p.m.

Source: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2012/07/_it_would_be_less.html

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