A terrible property insurance bill could come out of the Florida Senate this week.
Senate Bill 1770 passed a floor vote on Thursday. It is part misinformation, part hypocrisy and part outrage. In short, it is what South Floridians have come to expect from the Legislature on this issue.
As usual, the flashpoint is Citizens Property Insurance Corp., the state-run insurer of last resort. The goal of Sen. David Simmons, R-Altamonte Springs, the bill’s sponsor, and like-minded legislators who aren’t from South Florida is to jack up rates for Citizens customers in South Florida. To achieve that goal, legislators apparently are willing to say and do almost anything. Sen. Simmons began Thursday’s debate by saying that Citizens has 242,000 policies in Palm Beach County. He’s roughly 100,000 too high, according to the Citizens website.
Under current law, Citizens rates can rise no more than 10 percent a year. SB 1770 would keep that limit for existing customers. New policies, however, could rise between 60 percent and 84 percent in Palm Beach County for the same property. That change would break with the Legislature’s approach on Citizens since 2007, and here’s just one reason why it’s unfair: A homeowner could leave Citizens for coverage with a private carrier — as the Legislature hopes — but then get dumped by that company — even without filing a claim — and have no alternative but to go back into Citizens.
Here’s something else that would be unfair: The Senate exempted from this rate shock any county where 75 percent of the homes have coverage with Citizens. Only Monroe County meets that standard. Why just a single exception? And why another favor on sinkhole coverage that would benefit just Citizens policyholders in the Tampa Bay area?
The Legislature tried to keep those jaw-dropping numbers quiet. They came out two days earlier, during debate in the Banking and Insurance Committee over confirming Barry Gilway as the Citizens CEO. Mr. Gilway let slip some of the whopping increases that SB 1770 could produce. Sen. Jeff Clemens, D-Lake Worth, speculated that South Floridians could lose their homes if insurance costs went from $3,000 to $9,000, as Mr. Gilway predicted they could.
Sen. Garrett Richter, one of many legislators in service to the insurance industry, retorted that existing policyholders would not face such increases. Obviously, Sen. Richter hasn’t been reading in The Palm Beach Post how Citizens has ordered reinspections that, often wrongly, have cost policyholders their discounts and send their rates soaring. Such increases are not subject to the 10 percent annual limit.
SB 1770 has some helpful measure, such as a clearinghouse to help Citizens policyholders look for private coverage. Overall, though, the bill would be yet another gift to the private insurers and reinsurers that have caused Florida’s property insurance crisis. If it survives the Legislature, Gov. Rick Scott should veto it.
for The Post Editorial Board