The Florida Senate Banking and Insurance Committee has advanced a measure that would increase the maximum dwelling replacement value for homes covered by Citizens Property Insurance Corp. to $1 million from the current $700,000.
The committee moved the bill, S.B. 1106, on a 10-0 vote.
The measure covers homes of up to $1 million and single condominium units, including replacement of contents, of up to $1 million. Homes in Miami-Dade County and Monroe County, covering the southern tip of the Florida peninsula and Keys, already have the $1 million maximum coverage level, according to an analysis of the bill.
The legislation is designed to offer coverage to homeowners whose homes have replacement values more than $700,000 and either have to go to the expensive non-admitted market or go without coverage, it said.
The bill has some measures designed to make property owners think twice about whether to take Citizens’ coverage.
First, it would impose a surcharge on policies of $700,000 or more of $2,500 or 25% of a home’s premium, whichever is less.
Second, the annual rate increases approved for Citizens several years ago were limited to what it calls a “glide path,” limiting rate increases to 13% in 2024, 14% in 2025 and 15% in 2026 and thereafter. But under the bill, the glide path would not apply to homes with dwelling replacement costs of $700,000 or more, likely leading to larger rate increases than properties less than $700,000 in dwelling replacement costs, it said.
The analysis acknowledges Citizens is required by law to take steps to reduce the number of properties it covers, and recent efforts showed notable progress, it said. As of Nov. 30, Citizens reported 1,26 million policies in-force with a total exposure of $562.5 billion. That is a reduction of more than 74,000 policies and $23.3 billion in exposure, compared to Oct. 31, it said.
An attempt to obtain comment about the bill from a Citizens spokesman was not immediately successful.
Lawmakers are trying to find ways to ease the pressure on the property insurance market in Florida, such as a proposal to remake Citizens into a wind-only insurer and one to allow condominiums covered by Citizens to accept coverage for the depreciated value of their roof, not the replacement value.