SunSentinel.com
by Julie Patel
March 11, 2011
An unusual alliance of environmentalists, the Tallahassee Tea Party and conservative groups on Friday slammed state-backed Citizens Property Insurance and proposed measures to shrink it.
Citizens, the state-backed insurer of last resort, is Florida’s largest home insurer with more than 1.3 million policies. All property insurance policyholders in Florida are paying fees to pay off Citizens’ deficits from the 2005 hurricane season.
Sen. Alan Hays, R-Umatilla, said if a hurricane that’s predicted to hit once every 100 years strikes Florida, it could leave Citizens with a deficit of $13.7 billion – or more than three times the state’s budget shortfall. “We think we have a bad scene” now, he said. “We don’t know what bad is.”
Hays and groups such as the Florida Wildlife Federation, the Sea Turtle Conservancy, the American Consumer Institute, the Heartland Institute and Americans for Prosperity of Florida gathered at the state Capitol Friday to propose barring Citizens from selling policies for newly built property in environmentally sensitive coastal areas.
Insurers and environmentalists have pushed for years to eliminate government insurance programs such as the National Flood Insurance program and federal catastrophe insurance proposals. They say such programs encourage development in risky areas such as the coast and wildfire-prone regions where people should not be living.
On Friday, environmentalists and others told reporters that Citizens is a threat to the health of private insurers and the environment. “We believe subsidies that promote development in our most flood-prone areas of the coast…is bad policy,” said Manley Fuller, president of the Florida Wildlife Federation.
Hays said he plans to add the environmental protection provision to his bill, SB 1714, which would allow Citizens to raise policyholders’ premiums by up to 25 percent a year and require it to drop policies covering homes that cost $500,000 or more to replace by 2016. It would also bar policies for customers who find coverage from a private insurer that charges up to 25 percent more; bar policyholders from hiring public insurance adjusters; and require Citizens to consider outsourcing more of its work, similar to government insurers in other states, to help reduce its overhead and compensation costs.
