Why are so many insurance companies pulling out of providing coverage in Florida?
In: 774
Because they are limited in how much they can charge to stay profitable against FL’s State backed insurance’Citizens’.
And because l, frankly, some houses should not be eligible for insurance.
Citizens insurance was supposed to be an insurance agency of last resort. Meaning if you could not get insurance because of the high risk, then you could get insurance through them.
The problem is that the rates Citizens is allowed to charge is limited by the legislature. And they now have the lowest rates in the State. So actual insurance companies trying to compete in the free market have to try and compete against a State backed company that can’t charge accordingly. So people get Citizens insurance because it is lower than say State Farm.
So State Farm has to try and compete against a State backed, price controlled company and just can’t. So they lose even more customers to Citizens and it just gets worse.
Citizens is currently asking the FL office of insurance regulation to allow them to increase rates along the lines of what the market supports for competitors so they can move back into the option of last resort.
Citizens is supposed to be the ‘last resort’ for people that can’t get insurance on the free market, but from 3/2021 to today the number of police’s has gone from 569,868 to 1,223,204.
And again, some multi million dollar vacation home on the beach SHOULD be ridiculously expensive to insure or be impossible to insure. But people have said they need insurance and Citizens was created to cover them (basically taxpayers footing the bill).
A fix would be that a law that Citizens was only available for FL residents on their primary home. But a lot of people in high tax States have houses in FL to avoid State income taxes.
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