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Citizens Insurance Plan Will Cost Policyholders

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Feb 29, 2008 5:50 pm US/Eastern

Citizens Insurance Plan Will Cost Policyholders

MIAMI (CBS4) ― As part of the 2006 insurance law, the state-run insurer could charge double-digit assessments after a storm if lawmakers don't make changes in the legislative session that starts next Tuesday.

The worst case scenario would be after a catastrophic hurricane, or Category 5 storm. Homeowners of non-homesteaded properties could be surcharged up to 90-percent of their premiums.

Assessments are added to premiums if Citizens runs out of money to pay claims after a storm.

If the surcharges on the non-homesteaded policies do not cover the deficit, Citizens would then charge all of its policyholders, including homesteaded properties. If that's still not enough, Citizens can then asses all the insurance policies in the state, except workers comp and medical malpractice policies.

Prior to the change in insurance law, nearly every policyholder in the state was assessed equally. The change in insurance law made Citizens policyholders bear the brunt of paying off the company's losses.



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