Hurricane Earl off the coast of the United States, Sept. 2 2010.
Tallahassee, Florida - Florida is moving to shift the cost of paying big hurricane losses away from Floridians who do not have insurance through the state-backed Citizens Property Insurance Corporation.
Under state law Citizens has the power to place extra charges, called assessments, on virtually all insurance policies in Florida if the company runs a deficit following a catastrophic hurricane.
A new law shifts the cost of those assessments away from non-Citizens policyholders.
Citizens spokeswoman Christine Ashburn says those charges will be reduced from up to 18 percent in a year to no more than two percent. That would save Floridians more than $300 per policy on a wide range of insurance policies following a devastating storm.
"This is great news for millions of Floridians who drive cars and have renters policies or boat owners policies who are not necessarily insured with Citizens at all but absolutely bear these taxes if we have a large enough storm."
The legislation does not reduce surcharges for Citizens policyholders in the event of a big hurricane.
Ashburn says that's another reason for customers of Citizens to shop around for other coverage in the private market.
Citizens is trying to reduce its exposure and number of customers. The company has become Florida's largest property insurer with nearly 1.5 million policies and more than $500 billion in exposure.
Ashburn says the company wants to return to being the insurer of last resort as it was originally envisioned a decade ago.
She says the new law will help with that goal.
"It sends a message that Florida is open for business. It sends a message that we are shifting burden away from other companies' policyholders and to the folks at Citizens who actually bear that risk and we want to incentivize companies to remove policies and be active in this market."
This year private insurers have already removed more than 55,000 Citizens policies. That exceeds the number of policies removed from the company during all of 2011.