May 4, 2011
Tallahassee, Fla. – A group dubbed earlier this year by the media as an “unlikely coalition” joined forces today in a last-ditch effort to prompt lawmakers’ action before the end of the 2011 legislative session. Speakers, including Associated Industries of Florida, the Florida Wildlife Federation, the Heartland Institute and Florida TaxWatch addressed the importance of meaningful legislation which would reduce hidden “hurricane taxes,” reform Citizens Property Insurance Corporation, and foster a healthy private insurance market.
“Although we are down to the final days of the regular state session, we firmly believe the Florida Legislature must focus their efforts on the process of reforming both Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund,” said Barney T. Bishop III, President and CEO of AIF. “While there is legislation being debated on the floor, that if passed and signed into law will work to overhaul the system, it is imperative that our elected officials realize eliminating the ‘hurricane taxes’ and
allowing the private market to revitalize are necessary parts of the equation.”
Since 2005, all Floridians have paid billions in hidden “hurricane taxes” to cover the losses of both Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund. Homeowners, businesses, renters, churches, charities and automobile policyholders – whether they benefit from Citizens or the Cat Fund or not – are paying to subsidize the premiums of Citizens policyholders and the activities of the Cat Fund.
“For years, the Florida Wildlife Federation has been advocating for reform of our broken property insurance system. We stand today asking lawmakers to end the practice of allowing Citizens and the Cat Fund to subsidize million dollar homes on our coasts,” said Jay Liles, Policy Consultant, President of the Florida Wildlife Federation. “Reckless coastal development and artificially low premiums in the most hazardous areas of the state must be stopped. We should be protecting Florida’s coastal wetlands and barrier islands which serve as our first defense against storm surge floods and high winds rather than facilitating bad public policy.”
While Citizens Property Insurance Corp. was created as the insurer of last resort, today this government run entity insures more than 1.3 million policyholders statewide. Additionally, Citizens, the largest insurer in Florida, has openly admitted that its rates are inadequate.
“In the wake of a storm hitting the coast, it is unfair to force innocent taxpayers to assume the burden of responsibility for insuring those who have put themselves at greater risk,” said Dominic Calabro, President and CEO of Florida TaxWatch. “According to Florida TaxWatch’s research from March 2010, the economic impact of Citizens’ and the CAT Fund’s 100-Year Storm assessments would include a loss of 70,720 jobs and an annual impact of over $7 billion. In this economy, there is no way Florida taxpayers will ever be able to afford these assessments, which could amount to thousands of dollars per year, every year for 30 years.”
Despite recent reports describing Citizens as the “strongest and most profitable” insurer in the state, today’s press conference participants understand the reality of the situation and stressed the importance of revitalizing the private market. In the wake of the next major storm, continuing to rely on the unsound Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund – which both have the potential to go broke – is not an option.
“Most Floridians realize they are required, and will continue to be required, to contribute to the Florida Hurricane Catastrophe Fund. What they don’t realize is that those ‘hurricane taxes’ are inconsequential compared to the taxes that could be levied on their policies depending on how active this year’s hurricane season is,” said Don Brown, Senior Fellow, The Heartland Institute and former chairman of the Florida House Insurance Committee. “Some legislators and members of the media have commented
that without Citizens, many Floridians would be left uninsured. However, if the state allows Citizens to continue on its current path and a major storm makes landfall, estimates suggest ‘hurricane taxes’ could add up to as much as $14,000 for the average Florida family over 30 years. It’s for this very reason we stand here today urging the Legislature to make the necessary changes this session that better protect all Floridians.”