PORT CHARLOTTE, Fla. - Gov. Charlie Crist signed a bill Thursday that he and
others hope will lower Floridians' property insurance costs, although it
could mean large assessments for homeowners if a catastrophic hurricane
hits.
After officially signing the bill - his first as governor - in Tallahassee,
Crist visited homes of some people he said were the inspiration for the law,
including Stan Whitney of Port Charlotte. During the special session this
month in which lawmakers crafted the legislation, Crist told them about a
letter he'd received from Whitney about his premiums. Crist urged them to
cut rates with an admonishment that they needed to just "remember Stan," and
get the bill written and passed.
Crist greeted Stan and his wife Joan in the driveway of their one-story
stucco home and did a ceremonial bill signing, before handing the Whitneys
the pens.
"It is the voice of people like Stan and Joan that made this thing happen,"
Crist said.
Many lawmakers agreed that the voices of Floridians around the state
prompted them into action.
Residents have bombarded, not just Crist, but legislators with complaints
about rising insurance costs since the storm seasons of 2004 and 2005. Those
two years brought eight hurricanes to the state and cost insurance companies
$36 billion, leading to large premium hikes.
"We have a message for the people of Florida today: Help is on the way,"
Crist said in Tallahassee before signing the official version of the bill
into law.
Although the measure (HB 1A) will provide some relief to a large number of
home owners, how much remains murky. Estimates range from 5 percent for many
inland customers to averages of nearly 20 percent for others.
Also unclear is exactly when people will see savings.
Crist acknowledged it may take time for Floridians to start seeing the
relief. First, companies must file new rate plans with regulators. Then most
will see new premiums when they renew their policies.
"I'm real excited about getting these reductions to the people as quickly as
possible," Crist said. "It's going to take a little while, candidly, but
it's going to be a lot sooner than it would have been if this had not
happened today."
Between the Capitol signing and Crist's visit with Whitney, he did another
ceremonial signing on the front porch of Becky and Charlie Isiminger's home
in North Palm Beach. The couple saw their premium shoot from around $2,300 a
year to almost $7,000 when they were forced out of Citizens and into a
private company as part of the state's effort to limit the size of Citizens.
Under the new law, no one will be forced out of Citizens and into a private
"take-out company" if the private company's premiums would be higher.
Whitney, 78, had written the governor about his high insurance costs,
complaining that he wanted to drop the wind part of his coverage, but that
the law wouldn't allow that. One of the many provisions in the new law would
allow Whitney and others to forgo wind coverage if a mortgage lender lets
them.
Whitney said the attention that Crist has given to his problem has already
resulted in action. After someone from Crist's office called his insurer,
Tower Hill, to verify some information, Whitney said he got a call from the
company.
"They feel they'll be able to give me some relief," Whitney said.
A key provision of the bill forces an immediate rate decrease for Florida's
largest insurance company, state-created Citizens Property Insurance Corp.,
and cancels another planned increase for the company.
The other main way the bill seeks to lower rates is to make more state
backup insurance available to private insurance companies. By taking on more
of the responsibility to pay out of the Hurricane Catastrophe Fund if there
is a large storm, the state will reduce insurers' ultimate risk, cutting
their need to raise rates.
The backup coverage also will be cheaper than the private reinsurance that
most companies buy, immediately cutting one of their biggest costs. Those
savings will also be passed on to consumers.
But the state and its residents take on that risk.
If there's a large storm that wipes out the Catastrophe Fund, everyone with
insurance will be hit with assessments, or state tax money could be used to
make up the shortfall.
The measure also makes an effort to allow consumers to change their coverage
to try to save money. Besides going without wind coverage, some might be
able to have a higher deductible, for example. Many of those changes,
however, won't be available to homeowners who haven't paid off their house,
because mortgage lenders often dictate how much coverage they must have.
"The highest compliment we can pay to any piece of legislation is that it
makes Florida a better place than it was before it passed and I have no
doubt that is the case here. This bill makes Florida a better place to
live," House Speaker Marco Rubio, R-Coral Gables, said.
By: DAVID ROYSE, A.P.
Posted by Donald Urschalitz P.A. at January 25, 2007 08:02 PM
