Hefty rate hikes proposed for Citizens insurance policyholders

Lawmakers proposed raising Citizens Property Insurance policyholders’ premiums by up to 25 percent a year and make many policyholders ineligible for coverage.

Sen. Alan Hays, R-Umatilla, and Rep. Jim Boyd, R-Bradenton, filed the legislation, SB 1714 and HB 1243, on Friday. It would:

Allow Citizens to increase policyholders’ premiums by up to 25 percent, not including rates for sinkhole coverage or to buy private catastrophe backup coverage.

Bar a policy for a customer that finds coverage from a private insurer that charges up to 25 percent more.

Require Citizens to drop policies covering homes that cost $500,000 or more to replace by 2016. The deadline would be a few years earlier for homes that are worth $750,000 or more.

Bar Citizens policyholders from hiring a public insurance adjuster, hired to represent them in claims disputes.

Require Citizens to consider outsourcing more of its works, similar to state-backed insurers in other states. The insurer would hire a consultant to make recommendations on the costs and benefits of outsourcing, have its board submit a plan to the Cabinet for approval, and start implementing the plan by 2013.

Jeff Grady, president of the Florida Association of Insurance Agents, said recently that outsourcing might be a way to help the insurer lower its overhead and compensation costs.