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Florida Governor Ron Desantis Sounds Alarm by Calling Civil Insurance ‘Nonsolvent’ as ‘Explosive’ Hurricane Season Predicted

In Florida, homeowners are struggling with insurance rates nearly three times the national average, a situation that has raised concerns at both the state and federal level.

The average cost of home insurance in the Sunshine State has risen to about $6,000 per year, which is significantly higher than the national average of about $1,700. This increase in premiums is attributed to a 102% increase over the past three years, according to the Insurance Information Institute.

Governor Ron DeSantis has been particularly vocal about the challenges facing Florida’s insurance market, slamming the state’s reliance on Citizens Property Insurance Corp. highlighted as an important problem. Citizens was created by the Florida Legislature as a nonprofit insurer of last resort and has come under scrutiny for its financial solvency. DeSantis’ claim that the company is “not solvent” raises concerns about its ability to manage claims after major storms, potentially necessitating a government bailout.

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The insurance crisis is multi-dimensional, with Florida’s vulnerability to hurricanes and severe weather playing a major role. Regulatory and financial hurdles within the state’s insurance industry exacerbate the problem, leaving homeowners faced with exorbitant premiums and, in some cases, the inability to obtain insurance coverage. The situation has caught the attention of U.S. Senator Sheldon Whitehouse, who has requested detailed financial information from Citizens in light of DeSantis’ comments. Whitehouse’s concerns underscore the potential implications for federal resources and the national economy.

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Efforts to alleviate the crisis include legislative efforts to reform the insurance market. These efforts are aimed at stabilizing premiums and ensuring the solvency of insurers such as Citizens. However, the impact of these measures remains uncertain as homeowners continue to face the challenges of affordability and availability of insurance coverage.

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Citizen CEO Tim Cerio has refuted claims of financial instability and emphasized the company’s strong financial condition. He clarified that if citizens were to deplete their resources, Florida law would require a special surcharge to be levied on Florida residents, rather than seeking federal financial assistance. However, this approach means that a hurricane that hits part of Florida could lead to higher insurance costs for homeowners across the state, said Jake Holehouse, president of HH Insurance.

Adding to the concerns, AccuWeather’s forecast for an “explosive hurricane season in 2024” increases the urgency to address challenges in Florida’s insurance market. With forecasts of an extremely active season, fueled by factors such as the potential development of La Niña and record warm sea temperatures, the stability and preparedness of Florida’s insurance industry are more important than ever.

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As Florida faces the prospect of an unprecedented hurricane season, the dialogue among state officials, insurance industry leaders and federal representatives underscores the complex interplay of environmental, financial and regulatory factors driving the state’s insurance crisis. The path forward requires a concerted effort to create sustainable solutions that protect homeowners while safeguarding the financial health of insurers like Citizens Property Insurance Corp.

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This article from Florida Governor Ron Desantis Sounds Alarm by Calling Citizens’ Insurance ‘Nonsolvent’ as ‘Explosive’ Hurricane Season Predicted originally appeared on Benzinga.com

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