Yahoo Finance Florida Governor Ron Desantis' Raises Alarm By Calling Citizens Insurance 'Not-Solvent' As An 'Explosive' Hurricane Season Is Predicted
In Florida, homeowners are grappling with insurance rates that are nearly three times the national average, a situation that has prompted concerns at both the state and federal levels.
The average cost of home insurance in the Sunshine State has soared to approximately $6,000 annually, significantly outpacing the national average of about $1,700. This surge in premiums is attributed to a 102% increase over the past three years, according to the Insurance Information Institute.
Gov. Ron DeSantis has been particularly vocal about the challenges plaguing Florida’s insurance market, highlighting the state’s reliance on Citizens Property Insurance Corp. as a key issue. Established by the Florida legislature as a not-for-profit insurer of last resort, Citizens has come under scrutiny for its financial solvency. DeSantis’s assertion that the corporation is “not solvent” raises alarms over its capacity to manage claims after major storms, potentially necessitating a government bailout.
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The insurance crisis is multidimensional, with Florida’s vulnerability to hurricanes and severe weather playing a significant role. Regulatory and financial hurdles within the state’s insurance industry exacerbate the problem, leaving homeowners facing exorbitant premiums and, in some cases, the inability to secure insurance coverage. The situation has caught the attention of U.S. Sen. Sheldon Whitehouse, who has sought detailed financial information from Citizens in light of DeSantis’s remarks. Whitehouse’s concerns underscore the potential implications for federal resources and the national economy.
Efforts to mitigate the crisis have included legislative attempts to reform the insurance market. These efforts aim to stabilize premiums and ensure the solvency of insurers like Citizens. However, the impact of these measures remains uncertain as homeowners continue to confront the challenges of affordability and availability of insurance coverage.
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Citizens CEO Tim Cerio has countered claims of financial instability, asserting the corporation’s strong financial condition. He clarified that, should Citizens deplete its resources, Florida law mandates levying a special surcharge on Floridians rather than seeking federal financial assistance. This approach, however, means that a hurricane impacting one part of Florida could lead to increased insurance costs for homeowners throughout the state, according to Jake Holehouse, president of HH Insurance.
Adding to the concern, AccuWeather’s forecast for an “explosive 2024 hurricane season” intensifies the urgency to address Florida’s insurance market challenges. With predictions of an extremely active season, fueled by factors such as the potential development of La Niña and record-warm sea surface temperatures, the stability and preparedness of Florida’s insurance indiustry are more critical than ever.
As Florida faces the prospect of an unprecedented hurricane season, the dialogue between state officials, insurance industry leaders and federal representatives underscores the complex interplay of environmental, financial and regulatory factors driving the state’s insurance crisis. The path forward requires a concerted effort to devise sustainable solutions that protect homeowners while ensuring the financial health of insurers like Citizens Property Insurance Corp.
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This article Florida Governor Ron Desantis' Raises Alarm By Calling Citizens Insurance 'Not-Solvent' As An 'Explosive' Hurricane Season Is Predicted originally appeared on Benzinga.com
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