Last week, Representative Jose Felix Diaz wrote an op-ed piece in the Miami Herald regarding Citizens Property Insurance Corporation. His article decries the proposal that has been circulating to remove the 10 percent rate cap on Citizens Insurance. Representative Diaz represents District 116 in the Florida House of Representatives, (a portion of Miami-Dade county). While this area of the state is not normally a hot bed of sinkhole activity, it has had some sinkholes open up recently. During this period of unrivaled financial success for Citizens, insurance company friendly elected officials have often pointed to sinkholes as a source of excessive cost to Citizens.
Representative Diaz is points out the potential problems should the Citizens rate cap be removed. First, Citizens could increase homeowner's insurance rates by double what they are currently allowed. Second, an uncapped rate system for new customers would create a two-tiered portfolio for Citizens. The outcome of that could have a chilling effect on Florida's real estate market.
The 2013 legislative session will likely include many important bills regarding property insurance in Florida. It will be very interesting to see which side triumph, and what ramifications the Florida homeowner will see.