Ponte Vedra Beach, FL -- We have been lucky in Florida lately, NO HURRICANES! The risk is looking better for insurance companies and they are now lining up to purchase many Floridian homeowners insurance policies. Applications are being filed as we speak to take over policies. Will your policy be part of the Citizens take out program?
A new plan has been offered by the executive board of Citizens Property Insurance. This proposal from the Florida insurance company of last resort might cause issues with the industry and taxpayers.
Last month, men and women on the board voted to award over three hundred million in low-interest loans to help small private insurance companies take on some of the risk. These incentives needed to be large enough for some of the private sector carriers to get interested. That’s a bunch of money to hand over to the marketplace that is hurting so vastly. What do you think?
Here are three reasons why this is bad for the state of Florida and home insurance policy holders:
1. First, the incentives aren’t needed. Private insurance companies already plan to consider adopting in excess of 300,000 policies from Citizens the New Year alone - with no incentives. Consequently, handing out this incentive money, Men and women surplus - funds which will be needed in case your major storm hits - will likely be depleted for a bad one reason. Not to mention the policies and this includes proposed plan tend to be attractive to private insurers without incentives, because these are definitely some of Men and women best policies out of a risk perspective.
2. Second, this plan eliminates a level playing field for insurance carriers coming into the state of FL. The men and women on the board came up with the plan with no input by way of Legislature, that is a, or ratepayers, and plans to push it through no matter what public sentiment, and that is overwhelmingly resistant to the idea.
3. And third, virtually no insurance carrier in line to bring into play the policies continues to be audited in multiple years by regulators. Floridians can offer no assurances that these insurers - several of which have had massive underwriting losses during the last five years - are financially healthy enough to face up to storm losses.
Wouldn’t it be better to have open competition, so the healthiest insurers offering the top rated investor business plans to take advantage of policies?
Laboring under the Citizens Property loan program, private insurers could borrow as high as $50 million for 20 years any kind of low interest rate of 2 percent. In return, Citizens obligates the insurers to take the policies for only 10 years, and enables them to raise rates beyond 10 percent a year, after three years. Additionally, the diet plan fails to add in provisions for what happens in case your insurers encounter financial difficulties that hopefully will prevent them from repaying a loan.
What are your thoughts residing over this program? Do you think this is good for the state of Florida and our taxpayers? We would like you to give us your take on these low interest loans to private insurance companies already doing business in the Sunshine state.