TAMPA, Fla. — We told you a few weeks ago about how more than half of the private homeowners insurance providers in the state were slated to be downgraded by the financial analysis firm that rates them.
That left many people scrambling to Citizens Property Insurance, the government-run and regulated insurance which is usually meant to work as a final option.
Now, Citizens Insurance has more than 1 million policies and counting.
“The Florida property insurance market is in peril,” Mark Friedlander from the Insurance Information Institute said. “The crisis we are facing is escalating.”
The government-run and regulated, Citizens Property Insurance, is supposed to be a “last resort.”
But with private insurance companies going under or dropping in ratings, a representative from Citizens tells 10 Tampa Bay they’ve added 241,000 new policies since the beginning of this year.
Friedlander says that’s not good.
“Not only has citizens become the largest home insurance in the state of Florida, but they are 53% higher than the next highest insurer,” he said.
With all those policies, if we get hit by a severe storm, this government-run insurer could have to pay out a lot of claims.
Mike Peltier, a representative from Citizens, says the insurer has the money to handle a 1-in-100 year storm along the coast, and a 1-in-64 year storm farther inland. But if the costs exceed that, paying those claims could trickle down to everyone's pockets.
“In the event that Citizens exhausts its ability to pay claims, we are required to levy assessments, or if you want to call it a hurricane tax-on…on first our policy holders, and then other Florida insurance consumers,” he said.