Calculator Shows Costs for Homeowners After Major Hurricane

By: Troy Kinsey Email
By: Troy Kinsey Email

Tallahassee, FL -- June 4, 2012 --

The 2012 hurricane season is officially underway.

With it, insurance rates in Florida could be at the mercy of the tropics.

Just one devastating storm would cause premiums on all types of coverage to skyrocket.

Now, state officials are making it easier for you to find out how much more you'd have to pay.

The state's insurance consumer advocate put together an online calculator to help you pinpoint your liability after a major storm.

All you have to do is dial in what you pay for insurance, whether it is auto, home, business, or all three, and you'll get that potentially painful number.

Critics argue it's a hypothetical that may be politically motivated.

If a once-in-a-century blockbuster hurricane were to hit Florida, the state-run insurance company, Citizens, wouldn't have enough money on hand to cover all the damage.

It would have to charge everyone, whether you're a citizens customer or not, a hurricane assessment fee.

It may be a worst-case scenario, but the new online calculator could help to make sure you know exactly how you'd be affected.

Industry expert Bob Lotane calls it a wise move.

“We have had these assessments before, in '04 and '05, but back then, we were rolling in some money and the politicians decided to pay that off to keep those assessments low, so we've kind of been shielded from the truth about what could go on here, so this calculator is a good thing,” said Lotane.

The calculator's designed to cut through the confusing complexities of the insurance game and give you a bottom line.

For example, if you pay $967 a year for property insurance, and $1,104 in auto insurance, according to the calculator, you would pay and extra $151 a year over the course of 30 years if a cataclysmic storm were to hit.

That fee could easily double for those that live on the coast.

In a new letter, 25 state legislators call the potential fees "not fair" and "not fiscally sound."

They want Citizens to shed customers now to avoid the fees later, but not every lawmaker agrees.

Republican Senator Mike Fasano (R-D 11) helped defeat a bill that would have turned tens of thousands of Citizens customers over to private companies charging higher rates.

“There is a major difference. One is regulated, one is not. At least tell the homeowner that,” said Fasano

If enough people use it, the calculator may help drive public outrage over the fees.

In the end, a major hurricane will mean paying big money.

The question is who pays it and when.

Citizens does have $19 billion on hand.

That's enough money to cover damages from two big hurricanes, but not enough to cover that once-in-a-century storm we all fear.

If you're interested in seeing how much you'd owe in the aftermath of a major storm, you can check it out here: http://www.myfloridacfo.com/AssessmentCalculator/Consumers/AssessmentCalculator.aspx.

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Read the whole letter legislators sent to Citizens Property Insurance Corp. below:

Dear Mr. Grady,

We want lower homeowner’s insurance rates in Florida. There are so many things we wish were less expensive, including health care and gasoline . But the recent debate about Citizens Insurance rates is not about the cost of the insurance – it’s about who is paying for it. That is why we applaud the current Citizens board for recognizing that the current system is unsustainable, and for working for meaningful reform.

The purpose of insurance is to cover risk. Within the private market, where most consumers in Florida purchase their insurance, the customers pay for the actual cost to provide that protection – without any government subsidy paid for by the taxpayers of Florida. Not so with Citizens Insurance.

Adding new customers at subsidized rates is no more than a tax on every Floridian who does not have a Citizens policy – whether they live in central Florida, Miami, or Jacksonville. So the real question here is this: Should a government-created insurer of last resort be offering policies essentially at a loss, while continuing to expand, pushing out private sector insurers, and subsidizing some homeowners at the expense of others?

We don't think that’s good public policy. It’s not fair. It’s not fiscally sound. And it certainly does not reflect the core beliefs of a majority of the state Legislature, who passed a law requiring that Citizens become as financially solvent as possible – thus reducing the need to tax all Floridians for future shortfalls in an emergency.

Citizens Insurance should move toward once again being the insurer of last resort – not the beginning of a government-created single-payer system that supplants the private sector.

We understand and share the desire for lower homeowner’s insurance rates. However, Floridians who are currently paying full-price for their insurance in the private market don’t deserve to pay a subsidy for those on Citizens. We are greatly encouraged by the board’s desire for reform and its willingness to tackle this very complex and difficult issue. To that end, we urge the board to continue working to eliminate the threat of tax increases on Florida’s families and to bring fairness to the system for all regions of Florida.

Sincerely,

Sen. Don Gaetz Sen. Alan Hays Sen. Garrett Richter

Rep. Ben Albritton Rep. Dennis Baxley Rep. Jim Boyd

Rep. Jason Brodeur Rep. Daniel Davis Rep. Brad Drake

Rep. Eric Eisnaugle Rep. Matt Gaetz Rep. Bill Hager

Rep. Mike Horner Rep. Charles McBurney Rep. Larry Metz

Rep. Bryan Nelson Rep. Kathleen Passidomo Rep. Scott Plakon

Rep. Elizabeth Porter Rep. Stephen Precourt Rep. Lake Ray

Rep. Kelli Stargel Rep. John Tobia Rep. Mike Weinstein

Rep. Ritch Workman


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