In an attempt to reduce its enormous financial exposure, the Florida Legislature is considering retreating from price controls on property insurance rates that the state promulgated two years ago. According to an article in the Ocala Star-Banner, the new legislation could:
- Allow the state-backed Citizens Property Insurance Corp. to raise its rates annually by as much as 10% for some individual policyholders
- Reduce the size of the state hurricane catastrophe fund by $12 billion, returning it to the $16 billion level of 2007. Lawmakers had nearly doubled the so-called CAT fund in 2007 in effort to drive down rates by providing cheaper backup insurance to private companies.
The bottom line? A predicted average 5% rate-hike for state-backed property insurance in exchange for a reduction in the state’s taxpayers’ exposure in the event of a catastrophic storm season.
Is the trade-off worth it? Sound out in the comments!