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Hurricane WindsSimple questions sometimes provide great food for thought. Especially when dealing with complex issues, like Florida's windstorm insurance situation and state-run Citizens Property Insurance.

So here's a question that Citizens customer Doreen Trembley recently posed: "Has the idea of allowing only homesteaded property owners to get insurance from Citizens ever been considered?"

In an email this month to Citizens, Trembley wrote: "If Citizens truly has to reduce the number of policies, can this idea be explored? It just seems to me that if folks are financially able to carry TWO homes, if something happened to their [second] home…they would have another home to live in. And I think it's fair to give priority to people who live here all year and support the economy all year."

I don't know how fair, or legal, it would be to exclude entire categories of property owners — snowbirds, foreigners, investors, landlords — from getting coverage with Citizens, our so-called insurer of last resort.

But I do like the gist of Trembley's sentiments.

Maybe the question should be: Is it time to explore the idea of having a two-tiered pricing system for Citizens, with better rates for homesteaded property owners and higher rates for non-homesteaded properties?

That would be a way to give a break to year-round Floridians and working stiffs who actually live in their homes, and ask a little more from people who can afford vacation/winter/investment properties. The homestead concept has already been applied to our property tax system, with extra tax breaks and limits on annual assessment increases on Floridians' primary properties.

Why not bring the same concept to our state-run property insurer?

Christine Ashburn, Citizens vice president for communications and legislative/external affairs, said there have been past discussions in the Legislature about imposing higher emergency storm assessments and surcharges on non-homestead policyholders. She also said there has been recent talk in the Legislature about "limiting access to Citizens for only those homesteaded in Florida."

But the idea has been a political hot potato.

"As I am sure you can imagine, there are a lot of seasonal residents that help the economy of Florida (and don't necessarily use all of the schools, etc.)," Ashburn wrote me by email. "That issue has always been one that comes up as part of the policy debate surrounding this topic."

Trembley lives in a Boynton Beach mobile home community, and she's mad that Citizens keeps charging more and covering less. Meanwhile, Citizens keeps shedding policies with consumer-unfriendly methods as politicians fret about the insurer having too much exposure and risk. Citizens has shrunk to 933,000 policies, down from its peak of 1.4 million two years ago.

Trembley is curious about how many Citizens policies cover second homes and non-homesteaded properties, and how many Citizens-insured residential properties are owned by investors or corporations.

But Ashburn said Citizens doesn't have those numbers. "Unfortunately, Citizens does not collect (because there is no insurance reason to do so) homestead information based upon the tax definition," Ashburn wrote to Trembley. Ashburn said it would be difficult because Florida's 67 counties "house and share the data differently."

Maybe it's time to get those numbers. And then we can have a healthy debate about whether our state-run insurer can provide a better deal for full-time Floridians.

*****

Protect yourself against the damage Mother Nature can bring. Call Prestige Insurance Group, Inc. at (305) 969-8776 for more information on Miami windstorm insurance.

(Article courtesy: Michael Mayo, South Florida Sun Sentinel)
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