May 13, 2011
By: Bruce Berry
In preparation for a hurricane season that some forecasts say could be busy, Florida's primary homeowners insurance company has voted to borrow funds to enhance its reserves.
The board of governors for Citizens Property Insurance Corporation - which is run by the state and covers 1.3 million Florida homeowners - has voted to borrow $900 million through a bond issuance, according to various reports. An additional $500 million in private market reinsurance will be purchased to ensure the company will be able to pay out claims to Florida homeowners in the event of major losses due to hurricanes.
Officials with the group told the Sunshine State News the measures were needed in part because legislation that would have led to a increase in property insurance rates was batted down in the state legislature.
"We all had great hopes that the legislative session was going to provide us the ability to raise our rates to the appropriate levels," chairman James Malone told the source.
Lawmakers had debated the merits of raising rates for months but settled on a proposal that gives homeowners insurance companies more power to investigate fraudulent sinkhole claims. Legislators hope the measure would encourage more private insurers to enter the market and relieve CPIC of its coverage load.
For more about state insurance law you can visit: The National Association of Insurance Commissioners
Related Home Insurance Articles:
- NOAA predicts near-normal Eastern Pacific hurricane season May 25, 2012
- Safety officials call attention to home sprinkler system regulations May 24, 2012
- Thousands of St. Louis insurance claims cite recent hail damage May 22, 2012
- Tropical Storm Alberto changes course away from Carolinas May 21, 2012
- California tops the nation in dog bite claims May 17, 2012
