Posted: 04/12/2013
WEST PALM BEACH, Fla. – Hurricane Wilma destroyed a lot of homes in 2005.
Lawmakers say that state-run Citizens insurance may not have enough money in its account if another storm hits hard.
That’s why some say new homeowners should pay more.
Carlton Dobbs lives in an area insurance companies consider high-risk: in West Palm Beach, east of I-95.
When he bought last year, the only one who would write him an insurance policy was Citizens.
“It’s a big slice of my budget,” said Dobbs.
The health care worker paid around $1,650 for a year’s coverage, which goes into the $6 billion pot Citizens uses to pay out claims.
But an epic storm could mean billions more in payouts Citizens doesn’t have.
To close the gap, senators were told Thursday a bill they debated for hours could increase rates for new customers in Palm Beach County by as much as fifty percent.
Dobbs’s insurance bill would’ve been $1,000 higher.
“I just have a normal job, you know, live check to check. I’m more fortunate than most people and I don’t know how a family could do it,” said Dobbs.
Lisa Miller, the state’s former deputy insurance commissioner, says senators pushing the bill see rate increases as a much better alternative than higher taxes caused by a storm damage Citizens Insurance can’t pay for.
“That threat is much much larger than an increase in premium at the time they try to get into Citizens if this bill passes,” said Miller.
But West Palm Beach realtor Tim Frater warns of a different kind of economic problem.
A fifty percent increase in home insurance, he says, could be the difference between selling homes, or not.
“Just having this discussion and hearing what’s going on with Citizens, is going to deter them from trying to buy homes that are hard to find already,” said Frater.
A vote on the bill is scheduled next week.
