Florida's State-Run Citizens Insurance Warns Residents of "Hurricane Tax"

Home Insurance on Green Billboard.

Photo: Getty Images

Citizens Insurance, a state-run insurance company in Florida, warned residents that they could face a state surcharge, dubbed the “hurricane tax,” as the state's ongoing insurance crisis continues to mount.

As resident rates climb, policies are being dropped, and companies continue to fold, residents across the state could be just one storm away from paying more on their insurance policies.

If a major hurricane were to hit Florida this year and impact a majority of homes with Citizens Insurance policies, the state-run company warned it would have no choice but to impose a hurricane surcharge on homes, cars, and even boat insurance policies.

If Citizens Insurance depletes its surplus, it can and would impose a 2% tax on home, renters, car, and even boat insurance policies statewide.

Citizens Insurance policyholders could potentially face a 45% increase if a major storm hits, and experts warn that this could have a significant impact on them.

Doug Quinn, with the American Policyholder Association, warned that lawmakers must do more to address the situation.

“We know Citizens is operating at a loss, and we are obviously concerned about the fact their policyholder roles have ballooned,” Quinn noted as the company nears 1.2 million policies.

Citizens Insurance announced a rate hike of 15% on average on Wednesday, which is intended to build up their reserves and avoid a hurricane tax for everyone.

Michael Peltier of Citizens Insurance said, “it’s a fair warning, and we’ve been upfront about that. We don’t want to be in a situation where we have to levy assessments on other people.”

The ongoing insurance crisis in Florida has resulted in mounting problems for residents, with experts warning that the situation is unlikely to improve any time soon.


Sponsored Content

Sponsored Content