Florida regulators express concerns over insurance policy
Florida residents who have homeowners insurance policies with the state-run Citizens Property Insurance Corporation would be subject to steep cost increases if the agency were to ever exceed its $15 billion reserve fund, according to a report.
That scenario appears unlikely at the moment, as it would take a historic hurricane to force the CPIC into such a financial state, reported Insurance Journal. But that hasn't stopped Florida regulators and lawmakers from expressing their concerns with the current model. If any one of the CPIC's three insurance accounts were to run dry, policyholders would see their premiums increased 15 percent. If the entire organization's portfolio falls into the red, those increases would be as high as 45 percent.
That's not to mention the 3.54 percent hike all Florida homeowners - including those not insured through CPIC - would face if the state's separate Hurricane Catastrophe Fund were to run dry. CPIC policyholders would see that increase on top of their own assessments.
Some are concerned a number of medium to strong hurricanes - rather than one historic one - could sap those reserve funds more quickly.
Homeowners insurance losses could be steep this hurricane season, which forecasters at Colorado State University say could bring as many as nine hurricanes.
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