Calls grow to increase Citizens cap to $1M

As home values continue to soar, an absence of insurance options has become the status quo

Inflation is making thousands of Florida houses and condos ineligible for coverage by Citizens Property Insurance Corp., the stateowned “insurer of last resort.”

Owners of Citizens-insured homes with replacement values in the $500,000 to $600,000 range just a couple years ago have been receiving notices of non-renewal, forcing them to seek far-more expensive coverage in the unregulated surplus lines market.

The notices say that rising costs of construction and labor pushed their replacement values beyond a $700,000 eligibility cap in place in Broward, Palm Beach and every other Florida county except for two.

In Miami-Dade and Monroe, the state’s two southernmost counties, homeowners don’t have to worry about becoming ineligible for Citizens unless their replacement values exceed $1 million, thanks to exemptions approved in 2015 by the Florida Office of Insurance Regulation. The exemptions were granted after a study determined that the two counties — long considered most vulnerable to the destructive forces of hurricanes — lacked competitive insurance options and should have a higher eligibility cap.

But that absence of options has since become the status quo across the state, say a growing number of political leaders, insurance agents and homeowners. They say the separate eligibility thresholds are unfair to homeowners in the rest of the state whose replacement values are increasing because of economic forces outside of their control.

They want the Office of Insurance Regulation to raise the eligibility cap in Broward and other

counties where recent insolvencies, skyrocketing premiums, and decisions by private market companies to stop writing new business have left homeowners with few choices.

Owners of homes ineligible for Citizens are typically forced to seek coverage from surplus lines carriers, which may charge higher rates, are not regulated by the state, and are not required to provide the same coverages as so-called domestic insurers like Fort Lauderdale-based Universal Property and Casualty or Deerfield Beach-based People’s Trust.

“We’re right next to Miami-Dade and you’re telling me there’s a huge difference in the housing market?” says state Rep. Robin Bartleman, whose district includes Weston, Southwest Ranches and Pembroke Pines, just north of Miramar and the Miami-Dade County line. “I can’t imagine how they can justify treating Miami-Dade differently than Broward.”

In May 9, Bartleman wrote a letter to Insurance Commissioner David Altmaier asking “for your office to decide by study or otherwise whether there is not a reasonable degree of competition for homeowner’s insurance rates in Broward and other counties such that the $1 million maximum dwelling replacement cost for eligibility for Citizens coverage should apply there.”

During the May special legislative session convened to prevent the collapse of Florida’s private-market insurance industry, Bartleman and Rep. Chip LaMarca, a Republican from Lighthouse Point, co-sponsored legislation that would have required a new competitiveness study. The legislature took no action on the bill.