{"id":39648,"date":"2023-11-30T16:33:36","date_gmt":"2023-11-30T21:33:36","guid":{"rendered":"https:\/\/lakelandgazette.info\/news\/?p=39648"},"modified":"2023-11-30T16:33:42","modified_gmt":"2023-11-30T21:33:42","slug":"senate-committee-investigating-floridas-state-backed-home-insurance-company-as-private-insurers-flee","status":"publish","type":"post","link":"https:\/\/lakelandgazette.info\/news\/2023\/11\/30\/senate-committee-investigating-floridas-state-backed-home-insurance-company-as-private-insurers-flee\/","title":{"rendered":"Senate committee investigating Florida\u2019s state-backed home insurance company as private insurers flee"},"content":{"rendered":"\n

The US Senate Budget Committee is launching an investigation into whether Florida\u2019s state-backed home and property insurance company has enough money in the bank to withstand future disasters, as scientists warn\ufeff warming oceans and sea level rise are making storms more destructive.<\/p>\n\n\n

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Citizens Property Insurance Corporation exists as a so-called insurer of last resort – if owners cannot convince a private insurance company to cover their property, Citizens will step in. It insures about 1.3 million policyholders in the state, who typically pay more money for a policy that covers less.<\/p>\n\n\n\n

But as coastlines disappear and storms get wetter and more dangerous, risk is through the roof for many of the properties Citizens insures, putting intense financial pressure on the state-backed company. During a March press conference<\/a>, Florida\u2019s Republican Gov. Ron DeSantis said, \u201cI think most people know Citizens has not been solvent.\u201d<\/p>\n\n\n\n

After Florida was walloped in 2022 and 2023 by major hurricanes that together cost more than $100 billion in damages, Committee Chair Sen. Sheldon Whitehouse, a Democrat from Rhode Island, is writing to top Florida officials asking for documents that show how Citizens is planning to tackle mounting costs and exposure if a massive storm were to hit a major metropolitan area, like Miami or Tampa. The letter was shared first with CNN.<\/p>\n\n\n\n

\u201cFlorida is on the front line of the climate crisis, and it could take just one major hurricane to render Citizens insolvent – a fact the current governor has, himself, admitted,\u201d Whitehouse said in a statement.<\/p>\n\n\n\n

Citizens spokesperson Michael Peltier told CNN the insurer will \u201ccertainly cooperate\u201d with the committee\u2019s investigation.<\/p>\n\n\n\n

Of major concern to the committee is that if a major city gets hit, millions of Florida policyholders who aren\u2019t on Citizens could see massive spikes in their insurance costs. That\u2019s because state law says Citizens can tack special assessments onto millions of Floridians with car and home insurance, even if they are insured through private companies, not Citizens.<\/p>\n\n\n\n

In its letter to Florida officials, the Budget Committee expressed concern about \u201cpotential economic consequences of an eventual wide-scale decline in property values.\u201d<\/p>\n\n\n\n

Two years ago, Citizens wrote<\/a> that if the state was hit by a 1-in-100-year storm, Florida insurance holders \u201cwould have been on the hook for $24 billion in assessments tacked onto monthly premiums for years.\u201d As the number of Citizens policies have grown, reports from reinsurance companies Munich Re and Swiss Re have found that number could be much higher, anywhere from $36-$162 billion dollars, depending on how severe a future hurricane could be.<\/p>\n\n\n\n

If that were to happen, the Senate Budget Committee is worried Florida might turn to the federal government looking for a bailout, Whitehouse said.<\/p>\n\n\n\n

\u201cThe Committee has significant concerns about how such an insolvency would affect not only the Florida real estate market, but also the broader economy and the federal budget,\u201d he said. \u201cShould Florida look to the federal government for emergency relief, all American taxpayers could be on the hook.\u201d<\/p>\n\n\n\n

Fears about a possible federal bailout are not unfounded, Benjamin Keys, a real estate professor at the Wharton School of the University of Pennsylvania, told CNN.<\/p>\n\n\n\n

\u201cThey absolutely have a reason to be concerned; the exposure is enormous,\u201d Keys said. \u201c1.3 million of the riskiest policies in the riskiest state, full stop. It\u2019s correlated exposure \u2013 if a hurricane hits your house, it hits my house.\u201d<\/p>\n\n\n\n

\u2018An extreme amount of risk\u2019<\/p>\n\n\n\n

Of the states that have state-backed insurers of last resort, Florida\u2019s is by far the largest. It has steadily increased the number of consumers who can\u2019t get insurance anywhere else, as private insurers have pulled out of the state and smaller insurers have gone bankrupt after back-to-back major hurricanes.<\/p>\n\n\n\n

State insurers of last resort were originally intended as a stopgap for consumers, ensuring their coverage wouldn\u2019t be interrupted. But in Florida in particular, many more people have been forced onto Citizens as other insurers flee the state or go bankrupt, in part because the state is particularly vulnerable to climate change-fueled losses like hurricanes and rising sea levels, according to the Senate Budget Committee letter.<\/p>\n\n\n\n

That is amplified by the fact that Citizens\u2019 policyholders have some of the riskiest properties in the state, Keys added, such as properties on the coast or ones that have flooded multiple times.<\/p>\n\n\n\n

Florida isn\u2019t alone; some major private insurers have either pulled out or stopped writing new policies in wildfire-prone California. And premiums have also spiked for consumers on California\u2019s insurer of last resort \u2013 known as the FAIR Plan.<\/p>\n\n\n\n

But Keys said there are two important things differentiating California\u2019s FAIR plan with Florida\u2019s Citizens. For one thing, California has far fewer consumers on its state-backed insurance \u2013 a little more than 268,000<\/a> compared to Florida\u2019s 1.3 million. And second, if a major wildfire or storm were to hit California, state law there puts insurance companies on the hook for the high cost of special assessments, rather than individual policyholders.<\/p>\n\n\n\n

\u201cThe scale is just enormous,\u201d Keys said. \u201cAt that scale, that means there\u2019s an extreme amount of risk.\u201d<\/p>\n\n\n\n

Keys said the Senate Budget Committee\u2019s investigation signals the federal government is trying to get in front of a future potential disaster \u2013 and the billions of damages it could bring.<\/p>\n\n\n\n

\u201cWe know that in the event of a crisis, it\u2019s very hard for the federal government to withhold aid and support,\u201d Keys said. \u201cIt\u2019s not a good look.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The US Senate Budget Committee is launching an investigation into whether Florida\u2019s state-backed home and property insurance company has enough money in the bank to withstand future disasters, as scientists warn\ufeff warming oceans… <\/p>\n","protected":false},"author":2,"featured_media":34151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"0","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"","_seopress_redirections_param":"","_seopress_redirections_type":0,"_seopress_analysis_target_kw":"","inline_featured_image":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"wpai_generated_summary":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"dois","default_image_id":71799,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[9],"tags":[6907],"class_list":["post-39648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","tag-senate-committee-investigating-floridas-state-backed-home-insurance-company-as-private-insurers-flee"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/39648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/comments?post=39648"}],"version-history":[{"count":1,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/39648\/revisions"}],"predecessor-version":[{"id":39649,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/39648\/revisions\/39649"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/media\/34151"}],"wp:attachment":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/media?parent=39648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/categories?post=39648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/tags?post=39648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}