Insurance Assessment Fees for Home Owners

July 26, 2006

Reported by Libby White

Citizens Property and Casualty Insurance Company is for people who can't get a policy from the traditional market. District 37 State Representative Dan Morrish is the author of the plan. "Florida was able to create a tax free entity, which is what Citizens is. They are now able to hold the money they make instead of giving it back to the insurance companies that participate," said Morrish. He says the problem is no one dreamed two catastrophes would strike the state so close together. "We created citizens only two years before Hurricanes Rita and Katrina," explains Morrish. "So they had no time to build up their reserves to invest that and get money back and to buy enough reinsurance." Which is why home owners will eventually get two assessments on their bill; one regular and one emergency. Morrish says the assessments probably won't appear on the same bill and should run about three to eight percent of what the total premium is.

If you are wondering if that means you are paying for someone else's insurance, you're right. Rep. Morrish says, "It's absolutely true. It's unfortunate, but we always knew that part of the law was there." He says that's how they cover the millions of dollars they've borrowed to pay claims. Assessments will likely show up on your renewal for the next ten years. "It's $850 million divided by every insurance policy holder in this state," says Morrish. "Even those who had Citizens will have an assessment on their bill."

Keep in mind those assessments don't include the amount your insurance company could go up on your premium. Morrish says the way to lower insurance rates is to get more companies in the state to create more competition.