Blog: Chamber Poll Suggests Floridians Want Their State Out of the Insurance Business

Feb 7, 2013

The following article was published in The Insurance Journal on February 7, 2013:

Blog:  Chamber poll suggests Floridians want their state out of the insurance business

By Ray Lehmann

Floridians believe their state should stay out of the insurance business, rather than supporting a state-run insurance company, according to a recent poll sponsored by the Florida Chamber of Commerce.

The result comes from an issues analysis poll prepared for the Florida Chamber in November 2012, which found that 52 percent of respondents are opposed to the existence of the Citizens Property Insurance Corp., the state-sponsored property insurer that has grown to become the largest writer of homeowners insurance in the Sunshine State.

The polling was conducted through personal interviews with 700 Florida residents, picked to represent a cross-section of the state’s geography and demographics. In the sample, 72 percent owned a single-family home, 13 percent owned a condo and 15 percent were renters.  Thirteen percent of the sample had their home insurance with Citizens, while 81 percent did not and 5 percent were unsure.

Among Citizens policyholders, only 12 percent knew the state could charge them assessments of up to 45 percent in a single year to make up for shortfalls following a hurricane. A plurality of the policyholders – 43 percent of them – thought the limit was 15 percent, while another 32 percent thought it was 30 percent.  (Among non-policyholders, who can be charged up to 30 percent in post-event assessments to shore up Citizens, 80 percent thought the actual figure was 15 percent.)

Also noteworthy is that 82 percent of Citizens policyholders said they had “no information” about the up to 26 percent assessments the Florida Hurricane Catastrophe Fund and Florida Insurance Guaranty Association could lay on their home, auto and business insurance policies for up to 30 years after a storm.

But perhaps most noteworthy is this stark choice that the poll laid out for Citizens policyholders:

If given a choice, would you choose…

to pay 3% more for your Citizens Insurance policy and reduce your maximum assessment to 15% in the case of a major catastrophe;

to pay the current standard premium and be subject to as much as a 45% assessment in case a major catastrophe

Nearly three-quarters of Citizens policyholders said they would choose the former over the latter, with single-family homeowners, the elderly and those in the northern and southwestern parts of the state feeling most strongly that a 3 percent upfront surcharge was worth a substantial reduction in potential post-event assessments.

Among the 81 percent of respondents who were not Citizens policyholders, there were also some notable trends. Sixty percent said that Citizens should charge premiums that were adequate to cover potential losses, and another 62 percent said that Citizens policyholders, and not the state government, should pay the money needed to cover the 75 percent of Citizens’ sinkhole exposure that currently isn’t adequately funded.

Eight-nine percent of those who aren’t Citizens policyholders thought the fact that FIGA and the Cat Fund could assess home, auto and business policies following a hurricane was unfair, with 64 percent saying it was “very unfair.”

View the original article here: