Florida’s so-called “hurricane tax” will finally come off the insurance bills of its residents.
Citizens Property Insurance agreed to remove a 1-percent surcharge on homeowner and auto insurance policies, including the policies of people who aren’t even Citizens customers.
The surcharge will end in July 2015, two years earlier than planned. Citizens officials said the assessment could end early because the insurer is expected to have enough money to pay off money borrowed in 2007.
The state-created Citizens was forced to borrow money to pay off claims after slow-moving Hurricane Wilma lumbered through South Florida nearly a decade ago. Under state law, Citizens can place an assessment on most insurance bills, including auto insurance policies, to cover any losses.
But Citizens – like the rest of Florida’s insurance industry – has been able to build up a surplus since the state has not sustained a direct hit from a hurricane since Wilma.
Citizens, with nearly 934,000 policyholders, is supposed to be the state’s insurer of last resort but it is now the state’s largest property insurer.
Citizens officials estimate that the extra charge has cost some Floridians more than $1,000 since it was first put in place.
This is the second “hurricane tax” now in place that will be removed from insurance bills.
State officials earlier this year agreed to end next year a separate 1.3 percent surcharge that was also placed on insurance bills to pay off claims related to Hurricane Wilma. That surcharge, which is tied to the Florida Hurricane Catastrophe Fund, will come off bills this coming January.
Source: Tampa Tribune
