Editorial Lambasts Insurance “Takeout Program”

An editorial in today’s South Florida Sun-Sentinel lambasts the state-run “insurer of last resort” for its new rate allocations.

The author, a concerned resident, does not believe homeowners in low-risk areas should be forced to subsidize the property insurance rates of those in high-risk areas. For this reason, the provisions of Citizens Property Insurance Corp.’s “takeout program” are totally unfair.

No Citizens policyholders should be required to accept a private insurer’s policy if its premium is more than 10 percent higher than Citizens’ premium for comparable coverage. As it is now, affected homeowners either have to pay up or forfeit their homeowners insurance altogether.

Residents with a Florida home loan will, therefore, not have the option to forgo property insurance. Their lenders will obtain requisite insurance coverage on their behalf and pass the higher premium costs through to them in the form of higher Florida mortgage payments.

This practice could have greater repercussions than people realize — it may even force many such homeowners to sell their homes and move, probably to another state. The value of vast swaths of Florida real estate, particularly east of Interstate 95, will be dramatically reduced.

Florida insurance rates are already so high, even in “low-risk” areas, that many people who have contemplated moving to Florida from other states have had to rethink their plans. Others are having to decide whether to stay in Florida as it rapidly becomes a citizen-unfriendly state.

Insurance rates and property taxes need to be reasonably predictable. Many of our residents live on fixed incomes. Unless the rates of property taxes are made portable, they often do not have the option of moving to a smaller home, and they cannot absorb huge increases in their insurance premiums.

Add that on to soaring Florida mortgage costs for those with adjustable-rate loans and we are at a critical juncture. Already, the Sunshine State finds itself losing teachers to Georgia, which offers higher salaries and lower living costs. We seem intent on driving longtime residents, such as retirees and recent graduates alike, to do the same.

Maybe the restoration of the Everglades will occur naturally… as many of our current citizens are forced to abandon the state in search of affordable housing elsewhere.