With rising insurance costs, homeowners worry

Jan 25, 2012

The following article was published in the South Florida Sun Sentinel on January 25, 2012:

With rising insurance costs, homeowners worry

By Charles Elmore

Linda Sapp’s reaction to her insurance bill was sticker shock: the annual premium doubled to $4,800, adding hundreds to her monthly mortgage payment.

Her first thought: “There’s no way I can afford my house.”

Her son needs daily help with a medical condition that causes severe swelling in his legs. The Acreage resident works 20 hours a week at Subway to supplement her husband’s income as service manager for a fire-sprinkler company. Her State Farm bill sent her scrambling to find another insurer.


“How the hell much is enough?” Spatafora said. “They keep increasing the cotton-picking premiums. Are they going to price us out of existence so we can’t afford it?”

Affordability is not as popular a word as it once was in Tallahassee, where the emphasis these days is on encouraging insurance rates to rise. That is particularly true with Citizens, the state’s biggest carrier with 1.5 million policyholders.

“The true cost of living close to the coast, where hurricanes are most destructive, is much higher than Citizens policyholders have been paying,” said Lane Wright, spokesman for Gov. Rick Scott. “That’s because the rates have been held artificially low by politicians who’ve postponed the inevitable.

“This is a problem Gov. Scott inherited and is working to fix now. If we don’t, when the next natural disaster strikes, Florida taxpayers will be hit with a financial disaster to fill the insurance premium gap policyholders aren’t willing to pay.”

For many customers, bigger hikes are already coming through what consumer advocates characterize as backdoor rate increases. One way to boost premiums is to raise the projected cost of rebuilding homes. Software that Citizens uses to determine replacement costs is under review in South Florida and Tampa this month after consumer complaints.

Then there are reinspections that overwhelmingly tend to find homeowners no longer qualify for storm-resistant features that bring discounts, despite protests from homeowners that they followed the rules the state set and later repeatedly changed.

Reinspections raised Citizens premiums an average of 24 percent, or $718 a year, for 63 percent of 78,000 homes visited through Nov. 30. In 2012, reinspections are scheduled for 209,000 homes — adding $94 million to premiums at 130,000 homes statewide if trends hold.

Find this article here:  http://www.sun-sentinel.com/news/palm-beach/pb-wind-rates-higher-20120125,0,4660005.story