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Florida property insurance crisis: U.S. Senate demands answers

by: Nicole Rogers
Posted: Mar 21, 2024 / 06:02 PM EDT
Updated: Mar 22, 2024 / 08:48 AM EDT

TAMPA, Fla. (WFLA) — Gov. Ron DeSantis sounded the alarm on citizens last month, saying if a major storm hit Florida, the insurer of last resort wouldn’t be able to pay up.

Now U.S. Senator Sheldon Whitehouse is demanding answers.

The democrat from Rhode Island sent a letter to Citizens’ CEO saying he’s worried Florida would seek a bailout from the U.S. government.

“The federal budget being exposed to this kind of risk is a very significant concern,” he explained. “Also in the Senate Budget Committee, we’ve heard testimony about danger to the national coastal property values marketplace.

Not just in Florida, but wherever sea levels are rising along the coast, it creates insurance risks that can create for the United States the kind of economic shock that happened in the 2008 mortgage meltdown,” he continued.

But, the head of Citizens pushed back, saying the company is in a strong financial condition.

In a statement sent to 8 on your side, CEO Tim Cerio said, “We can think of no scenario in which citizens would be required to seek federal financial assistance.”

He pointed to Florida law, saying if Citizens ran out of money, they’d levy an assessment, or a special surcharge, on Floridians, not the federal government.

President of HH Insurance Jake Holehouse said because of that, even if a hurricane hits Miami, people in Tampa could have to help pay for it.

“You could see over 50% of an additional premium surcharge applied to a Tampa Bay area homeowner who is already struggling with high insurance rates, and now it just gets worse,” Holehouse explained.

8 On Your Side reporter Nicole Rogers asked Holehouse, “Say we have some catastrophic storm that Citizens can’t cover and they ask Floridians to pay for it and Floridians can’t, then what happens?”

“That is probably where the US Senate Committee is a little concerned,” he responded. “When Citizens is the size that it currently is, we’re not the US Treasury.

“Florida can’t print our own currency, so we face a lot of political pressure in making it larger and making rates cheaper within Citizens, but I think when you think about the risk factor there, that’s a great summary as to why Citizens shouldn’t be the size that it is,” he continued.

Cerio echoed that claim saying in his statement, “Although Citizens’ assessment authority means that it will always be able to pay claims, Citizens’ rates are currently actuarily unsound because of the ‘glide path.’ It is critical that Citizens be able to charge actuarily sound rates to help minimize the risk of such assessments on the people of Florida.”

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