EDITORIAL: Bill would give Citizens a monopoly
Apr 28, 2008
The Keynoter–April 25, 2008
A well-intended Senate bill (SB 2860) contains a provision that would prohibit Citizens Property Insurance Corp. from selling a wind-only policy to new applicants, instead requiring it to sell all perils like fire, theft, liability and more. This would raise premiums and decrease coverage for thousands of coastal residents and businesses.
Citizens would basically be a monopoly in Monroe County since there is no company financially capable of writing the peril of windstorm. Therefore, there would be no other choice for the consumers. Also, if this does happen, the companies that are writing in Monroe for the other perils such as fire, theft, liability, jewelry and whatever else the consumer needs would be gone. If the companies have no business, they would not write in Monroe County since they would be unable to justify the expense and loss verses the income generated.
Since many private carriers currently write the perils other than wind, they give significant multi-policy discounts for auto, watercraft, personal umbrellas, etc. These discounts would evaporate when Citizens writes those other perils instead. In my agency the premium impact from this could be as high as 50 percent for some clients.
– Citizens’ premiums for a multi-peril policy (including wind) are higher, even disregarding the multi-policy discounts. There are examples of premium increases that are 150 percent or more for thousands of policyholders, who will also suffer coverage shortfalls.
Unless SB 2860 by state Sen. Jeff Atwater is amended to maintain current law with respect to Citizens’ wind-only policy options, consumers would pay substantially more for substantially less. There would be no other insurance alternative for the homeowners of Monroe County, only Citizens.