Sunshine State Homeowners Face New Property Insurance Fee

Homeowners in Florida should prepare for yet another increase in their insurance premiums as more insurers are leaving or failing in the state.

Recently, state insurance regulators approved a plan that imposes a 1% emergency assessment on property insurance. The assessment is intended to address issues caused by several major insurance carriers exiting Florida.

The order requires insurance companies to collect the assessments from policyholders beginning in October and remit the funds to the Florida Insurance Guaranty Association (FIGA).

FIGA is a non-profit organization created to manage claims for homeowners whose private insurers have become insolvent. To offset the shortfall, FIGA intends to borrow $150 million and issue up to $750 million in Insurance Assessment Revenue Bonds to pay off its debt and handle the remaining claims.

Policyholders will be required to pay the assessments until all the bonds are paid off and are no longer outstanding.

This development is also affecting the real estate market; home buying activity has declined partly due to fears over rising insurance costs.

Homeowners who were not affected by hurricanes or bad storms are also experiencing an increase in premiums, which is frustrating for them. Florida has been grappling with a property insurance crisis that has led to increased rates and the collapse of several insurance companies.

According to the Florida Department of Financial Services, seven insurers have become insolvent since last year, and experts predict that premiums may increase by 20-25% by June.