Property owners have spent years dealing with property insurance increases, and another is on its way.
Last week, state insurance regulators signed a plan that will tack on a 1% emergency “assessment” to property insurance to deal with issues caused by several large carriers leaving the state of Florida.
According to the order, insurers will collect the assessments from policyholders starting in October and send the money to the Florida Insurance Guaranty Association (FIGA), which is the nonprofit agency created to handle claims for homeowners whose private insurers became insolvent.
Seven property insurers have been deemed insolvent since early 2022.
“The emergency assessment is necessary to secure funds for the payment of covered claims, to pay the reasonable costs to administer such claims, including claims resulting from insurance companies that have become insolvent or may become insolvent as a result of losses incurred due to hurricanes, including but not limited to Hurricanes Irma, Michael and Ian, and to secure bonds issued to generate revenues to pay claims,” FIGA Executive Director Corey Neal wrote in an April 4 letter to Insurance Commissioner Mike Yaworsky.
Under the plan approved last week by regulators, FIGA is borrowing $150 million in short-term financing to help pay claims. It then will issue up to $750 million in revenue bonds to pay off the short-term financing and to pay remaining claims. Money from the assessments will be used to pay off the bonds.
The FIGA website said the 1% assessment will continue until the “bonds have been paid in full.”
“What you’re really seeing here is the mechanism of the state insurance industry working properly the way it should, should a carrier become insolvent and unable to pay their claims,” said Sean Way with the company We Insure in Jacksonville. “We always talk with our clients about the fact that their insurance is backed by theFlorida Insurance Guaranty Association. That’s what has happened here.”
Even so, News4JAX spoke with numerous homeowners and renters who were not happy to hear their monthly mortgage and rent could be going up because of the assessment fee.
“I pay $1,200 in rent. It has gone up every year the last three or four years,” said renter James McKee. “It’s ridiculous.”
“Everywhere you go now it’s different prices. Sometimes the prices change from day to day,” said renter Lucille Williams.
The assessment will come as property-insurance policyholders throughout the state face soaring premiums. Assessments will also be collected on a variety of types of other insurance policies, though they will not apply to auto insurance.