ORLANDO, Fla. – State lawmakers say Florida’s private property insurance market has collapsed.
The situation is being described as a crisis. Insurers are going bankrupt. Others are canceling policies and raising rates, and homeowners like Steve Oswald are feeling the pinch.
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“I’m almost at the point that I’m ready to sell my house and just take an early retirement in another country, to be honest with you,” Oswald told News 6.
Oswald is like many Florida homeowners; he says the last few months of dealing with homeowners insurance has definitely taken its toll.
“It’s ridiculous how it has gotten so out of control,” Oswald said.
Oswald was one of the 140,000 policyholders who were with St. John’s Insurance when the company was ordered liquidated.
Oswald had been with St. Johns for 10 years when he got a letter stating Slide Insurance would assume his policy.
A couple of months later, when his policy was up for renewal, he says the premium nearly doubled in price, to more than $5,500 a year.
“When you go shop for new insurance, especially in today’s market, all of a sudden you’ve got shock value when you look at what another company wants to charge to cover you,” Oswald said.
Oswald shopped around and said the quotes were mind-boggling, including one for more than $7,000 a year.
So he turned to Citizen’s Insurance.
“They came in with the best options, and one of the better prices for the year,” Oswald said.
Citizens Insurance is state-backed and is supposed to be the insurer of last resort. With prices from other insurers becoming cost-prohibitive, thousands of Floridians are turning to Citizen’s — hundreds of thousands.
The company tells News 6 they currently have 840,000 policies.
In March they were adding 6,000 new policies per week. Now they are adding 7,000 policies per week, according to Michael Peltier, a company spokesperson.
“That kind of growth is unsustainable for any market,” Peltier said.
“The risk is not that Citizen’s is going to go away — that’s not a risk at all,” he said.
If a major storm hits and Citizen’s exhausts its surplus and its ability to pay claims, by law Citizen’s would assess or increase rates for its policyholders, first, according to Peltier.
“If we still can’t pay our bills, then we can levy an assessment on all Florida property insurance owners, and automobile owners to help make up the difference,” Peltier said.
So, he says the bottom line is the residents of Florida are going to end up footing the bill if things go awry.
“And that’s what we are trying to avoid,” he said.
Property owners like Oswald want to avoid it too and he is calling on lawmakers to act.
“State officials are worried about a fight with Disney versus getting this insurance on. Let’s get what’s affecting the people first, and come back and deal with that later,” Oswald said.
Florida legislators are planning a special session to deal with property insurance next month. The big question is will they be able to produce meaningful legislation to offer homeowners some relief, and relief is needed quickly because hurricane season is fast approaching.
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