Homeowner’s Insurance: Part Deux

Last night I came across a post on the Herald’s political blog Naked Politics that grabbed my eye.  The article (read it in its entirety here) concerned a proposal under consideration by the Citizens’ Insurance board to charge new customers rates higher than those of existing customers.  But here’s the part that really got my attention:

Existing Citizens policyholders are protected from large rate bumps by a statutory 10 percent cap on premium increases — and will continue to be. Under the proposal to be considered Thursday, new policyholders could be charged initial rates far more than similar customers who have already been in the pool.  Going forward, however, all customers would be protected by the 10 percent limit in effect for the company’s nearly 1.5 million current policies.

I found this astonishing because:  1) I didn’t know there was any 10 percent cap, and 2) my annual premium just increased by nearly 30 percent.  If there is a “statutory 10 percent cap”, then how is that possible?

I called my insurance broker to ask what’s up with that, but am still waiting for an explanation.

What’s also noteworthy about the article is that the political discussion in Tallahassee seems to be taking place in some parallel universe where there is a private market for home owners’ insurance.  The article goes on:

Sen. Garrett Richter, R-Naples and chairman of the Senate Banking and Insurance Committee, has been a long-time advocate of boosting Citizens premiums to bring them in line with the private market [emphasis added].  As long as Citizens has below market rates, Richter said private companies will not return and Florida taxpayers will continue to be on the hook in the event of a catastrophic storm.

Doesn’t this guy know that there is no private market in South Florida and that Citizens is the only one writing new policies?  If there is no private market, how can there be ”market rates”?  As far as I  can tell, the only private companies taking on home owners’ policies are the ones set up to take over the policies that Citizens is trying to dump as part of its “depopulation” policy.  (See related previous post.)

I can’t seem to escape the feeling that there is no adult supervision of Citizens in the state government, which accounts for the capricious and arbitrary rate changes.  Or perhaps rather that the entire discussion is being stage-managed by the insurance industry.

It would be interesting to know how our insurance rates compare with similar coverage in places like Biloxi or Galveston.