Florida’s largest insurance company is warning if the property insurance market doesn’t stabilize, residents could end up paying a “Hurricane Tax.”
The newly appointed CEO of Citizens Property Insurance, the state-run insurer of last resort, told a state Senate committee the company is working to depopulate the number of policy holders.
“The larger we grow, the greater our exposure,” said Tim Cerio, who was appointed CEO of Citizens in January. “The greater our exposure, the greater the potential financial burden on the taxpayers of Florida. People who aren’t even Citizens customers.”
Citizens has seen exponential growth in recent years.
It has tripled the number of policy holders since 2020, now more than 1.2 million customers.
The company is hoping to depopulate its customers, but they don’t expect to see a significant drop until the end of the year.
Cerio warned if the insurance company's surplus were to be depleted, then they are required to impose an emergency assessment to every citizen of Florida.
“Assessments have been called Florida’s ‘hurricane tax,’"erio said.
“These emergency assessments aren’t limited to homeowner’s policies. They will hit every policy. Home, automobile, boat, etc.”
Cerio says the recently passed series of laws targeting insurance related litigation will help the company.
The same laws also now allow Citizens to better pool some of their resources, Cerio says, in hopes of keeping the surplus in solid shape.
Cerio says the best step for the financial security of the state is for Citizens to get back to being the ‘insurer of last resort.’
“If you are in citizens, we are going to take care of you. And you will receive excellent customer service until you are hopefully able to move on to a better policy in the private market,” said Cerio.
Even if a so-called hurricane tax is ever imposed, the Insurance Information Institute says Citizens will remain standing and solvent.
“We know that Citizens is safe,” said Mark Friedlander with the III. “They are supported by the state. They will never fail.”
