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Everyone with a property insurance policy in Florida is paying for hurricane damage from 2004 and 2005. The reason, Citizens Property Insurance didn’t have the cash on hand to pay all its claims. The state run insurer of last resort has now grown to 1.4 million policies. As Whitney Ray tells us, state lawmakers are trying to lower the risk, but disagree on how it should be done.

If you insure a house, a car or even a boat in Florida, you may be shocked to know that your policy includes charges for hurricanes that hit in 2004 and 2005.

Stephanie Wilson’s car insurance policy includes a 10 dollar assessment for those storms.

“I don’t think it’s fair,” said Wilson.

The average homeowner pays 30 bucks a year. Those payments will continue through 2017.

Citizens Property Insurance has more risk than reserves, and since the state runs Citizens, when it can’t pay its claims, the costs are passed on to every policyholder in Florida through emergency assessments.

State Senator Garrett Richter is sponsoring legislation to lower the risk by allowing out-of-state insurance companies to take Citizens policies.

“Citizens of Florida are on the hook for 500 billion dollars in exposure if hurricanes come and I think everyone can agree that we need to shrink Citizens and take it back to insurer of last resort,” said Richter.

State Senator Mike Fasano agrees that Citizens is taking on too much risk, but opposes the bill because the companies that would write the new policies are out of reach of Florida regulators.

“They have no recourse if the insurance company, the out-of-state, unregulated surplus-lines company, were to all of a sudden, which they will, raise rates because they don’t have to get approval from the Office of Insurance Regulation,” said Fasano.

If nothing is done and a major storm hits a large Florida city, emergency assessment could jump from 30 dollars a year, to more than 400. The bill has already passed the House. If it passes the Senate and is signed in to law, out-of-state companies could begin taking customers from Citizens. The customers they pick would receive a notice in the mail. If a policyholder didn’t want to leave Citizens, they would have to respond to the letter.