Orlando, FL -- (SBWire) -- 10/09/2012 --The high cost of rising home insurance premiums is driving potential buyers from the market. But according to Florida state leaders and executives at state controlled insurance company Citizens, the increased rates are necessary to bolster the private insurance market and to protect against potential future “hurricane taxes” if a storm created enough damage to wipe out Citizens’ cash stores. Hurricane taxes are levied on nearly all Florida residents and are needed as a safeguard against future destruction, says Citizens.
Governor Rick Scott has stated he is in favor of limiting Citizens’ reach. Meanwhile, the rate hikes levied by Citizens are suppressing the housing market, say critics, chilling purchases and increasing home foreclosures. Citizens’ board chairman Carlos Lacasa has stated that Citizens recognizes Florida’s housing issues, but must follow the law. Citizens has recently changed policies to end coverage for new homes being constructed as well as for some older homes.
The housing market in Florida has been hit hard by the mortgage crisis, and is in the top ten states for extensive property insurance costs. One-fifth of the state’s homeowners report that they are behind on mortgage payments, while half of all mortgages are currently underwater. Florida also has a higher percentage of delinquent mortgages than any other state, followed by Las Vegas. Numerous home owners have reportedly emailed Gov. Rick Scott with complaints about insurance rates skyrocketing to the point where mortgages were in danger of default due to cost. Sen. Mike Fasano, R-New Port Richey, has rallied against Citizens, and reports that homeowners are contacting his office to complain that their homeowner insurance premium is now higher than their mortgage payments.
In early 2012, Citizens halted its builders’ risk insurance program, which had offered coverage to new construction. Home builders then had to look for limited private market property insurance.
Florida has long attempted to limit Citizens’s reach and Florida home insurance regulators just announced an additional 60,000 Citizens Property Insurance Corp policies will be approved for removal, following the Office of Insurance Regulation approval of some 150,000 policies slated to be given in November to domestic, Florida-based. On October 1, Citizens' policyholders are to be notified of the take-out request and given 30 days to asses to offer. A lack of response on the part of the policyholders will allow a private sector company to assume them.
To learn more call 1.888.525.2210 visit http://www.floridainsurance.com
High Cost of Home Insurance Premiums May Be Slowing Florida Home Market