Tallahassee, FL -- Governor Charlie Crist says he will likely sign a new plan that will reduce homeowner insurance rates across the board. Although some residents will save more than others, lawmakers say it's a good start. - Fox 35 News
Here are some Specifics:
STATE BACKUP FUND
-- Insurance companies will be able to get additional backup insurance from the state's Hurricane Catastrophe Fund at rates lower than on the private reinsurance market.
-- Repeals a law that had called for insurers to pay extra into the fund to build up its reserves.
CITIZENS PROPERTY INSURANCE
-- Allows Citizens to write policies that cover risks other than wind damage in certain areas, meaning it can spread its risk more and thus lower rates.
-- Rescinds a 21 percent average rate increase that customers began seeing Jan. 1. Returns rates to 2006 levels, and requires they stay there for all of 2007.
-- Cancels a 56 percent average Citizens rate increase that was scheduled to go into effect in March.
-- Deletes a requirement that Citizens, the state's largest insurer, charge rates high enough to buy reinsurance to cover really large losses.
-- Deletes a requirement that Citizens rates be "no lower" than the top 20 other insurers in a market, a provision that had kept the company's rates artificially high.
POLICY CHOICES
-- Requires insurance companies to sell policies that don't cover wind damage, if the policyholder writes a statement saying they want to go without hurricane coverage. Many banks, however, may not let homeowners do that if they still owe money on their houses.
-- Allows policy holders to choose higher deductibles than they're allowed to have now, taking on more risk themselves in the event of a loss in exchange for lower premiums.
-- Requires insurers to allow policyholders to go without coverage for contents of the house.
-- Allows policyholders to pay premiums in a quarterly or semiannual installment plan.
REINSURANCE
-- Allows state regulators to waive a deposits requirement for foreign-based reinsurance companies. The idea is to lure more worldwide reinsures to sell coverage to Florida companies, raising the possibility they'll be able to find additional cheaper reinsurance.
EXCESS PROFITS
-- Prohibits excess profits by insurance companies, measured by certain thresholds over a 10-year period and requires refunds to be made to consumers if that level is surpassed.
"CHERRY-PICKING"
-- Requires insurance companies that write auto insurance in Florida, and homeowners policies in other states, to also write homeowners policies in Florida -- unless an affiliate of that company already does so. That goes into effect Jan. 1, 2008.
BUILDING CODE
-- Gets rid of the "Panhandle exemption" from the building code for the area from Franklin County to the Alabama border in the Panhandle. The exemption, in effect since 2000, enabled homes farther than one mile from shore to be built to lesser standards than in the rest of the state. Buildings must meet the windborne debris requirements in the 2006 International Building Code standards.
--Associated Press
My feeling is that this initial proposal/plan will undergo changes in a near future and we shall see.
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