Governer Crist Vetoes “Consumer Choice” Bill
On June 24, 2009, Governor Charlie Crist vetoed HB 1171, which may incite an exodus of home insurance companies from the state. What was HB 1171? Known as the “Consumer Choice” bill, the legislation would have allowed qualifying home insurance companies (namely those with a capital surplus of at least $200 million and a ratio of net written premium to its surplus of no more than 2-to-1) to charge rates higher than those previously set by Florida.
In aletter from Florida Insurance Commissioner Kevin McCarty to Governor Crist, McCarty noted that the need for such rate regulation arises from the disadvantage consumers face when shopping for insurance. “Normally, if a seller of a product asks too much for it, the consumer can walk away,” McCarty wrote, “but home insurance is not like that. Lenders require maintenance of hazard insurance as a condition of keeping the mortgage effective.”
Will Other Home Insurance Companies Follow State Farm?
State Farm announced back in January of 2009 that they would be leaving the Florida property insurance market. It remains to be seen if other highly capitalized home insurance companies will follow suit after the failure of HB 1171 to pass. This is especially important to sinkhole damage claims, as counties with high volumes of sinkhole activity – like Marion, Hernando, Pasco, Pinellas, and Hillsborough – struggle to provide adequate home insurance coverage.
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