Crist signs insurance bill ……………………….TALLAHASSEE, Fla. (AP) - Jan. 25, 2007 - Gov. Charlie Crist planned to sign a bill Thursday that he and others hope will lower Floridian’s property insurance costs, although it means that the state could have to pay billions of dollars if a castrophic hurricane hits.
The bill aims to cut into the skyrocketing cost of home insurance that many Florida residents, especially those on the coasts, have seen since the busy hurricane seasons of 2004 and 2005. Many have seen premiums more than double or triple.
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, particularly those on the coast.
A key provision of the bill forces an immediate rate decrease for Florida’s largest insurance company, state-created Citizens Property Insurance Corp., and cancel 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. But the state and its residents take on that risk.
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.
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.