Rick Scott, the current Republican candidate for Florida Governor, has released his position on the state’s insurance company, according to the Miami Herald. Scott is calling for the government run program to be “actuarially sound.” He is also declaring that Citizens should be turned into the insurer of last resort in the state and for further deregulation of Florida’s insurance markets.
Alex Sink, Scott’s opponent, and current Democrat candidate for Florida Governor, also believes that Citizens needs to become financially sound and should also become the insurer of last resort.
Scott’s campaign stated that because Citizens is currently on shaky financial ground, a major disaster would place taxpayers at financial risk. However, putting Citizens on solid financial ground may require policy holders to pay greater premiums. Senator Mike Fasano, R-New Port Richey, says he was informed back in 2009 that rates would triple for Citizens’ policy holders if the State decided to charge actuarially sound rates.
Sen. Fasano also brought to light a major side effect of making Citizens’ financially sound. Foreclosures are likely to increase with higher insurance premiums, especially in this current real estate climate.
Both Scott and Sink each want to reduce insurance fraud. Specific proposals address insurance fraud issues such as programs designed to provide homeowners with incentives for hurricane-proofing improvements.
Scott’s plan does have its detractors. Democrats argue that his plan is a giveaway to the insurance industry and that Republican contentions that raising insurance rates will ultimately lead to lower rates is ludicrous.
Ultimately, the system does need some sort of change because a major hurricane could have a devastating effect on not only Citizens insurance, but Florida as a whole.
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If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.