Rising Insurance Rates Push Florida Homeowners to Brink
ST. PETERSBURG, Fla., June 28 — Harold Polsky and his wife, Barbara, moved to Port Richey, Fla., in 2002 with plans to retire. Now they find themselves in a hurricane-damaged home, spending half their income on a mortgage and skyrocketing insurance rates.
"We figured we were making the last move of our lives," said Mr. Polsky, 49, whose three-bedroom home was damaged by Hurricanes Frances and Jeanne in 2004. "Now we're ready to move out of state, and we shouldn't have to."
Florida is losing its luster for many residents like him, who are scouring for homeowners' insurance after two ferocious hurricane seasons and struggling to pay for what they find.
Abandoned by insurers with cold feet and empty pockets, homeowners are increasingly turning to the Citizens Property Insurance Corporation, the state-created insurer of last resort, which by law must charge more than private insurers to be noncompetitive. Citizens has picked up 150,000 homeowner policies in Florida since June 2005, said Rocky Scott, a spokesman, and expects to add another 320,000 by the end of the summer.
Citizens, created in 2002 as a safety net for homeowners, is now the second-largest insurer in the state, carrying 70 percent of Miami-Dade County policies alone. This summer it anticipates becoming the largest homeowners' insurer in Florida, with 1.2 million policies.
Last year, hurricane claims put Citizens $1.73 billion in the red. The Legislature bailed out the company with $715 million from the state surplus. Homeowners are picking up the remaining tab through assessments to their policies, which in some cases are twice as expensive as last year's.
In some ways, the higher rates are forcing Florida residents to confront the real costs of living in a hurricane-prone region, and many say life in the tropics may not be worth the price.
George Myers, a mortgage broker in St. Petersburg with a modest 1,000-square-foot home built in 1947, was recently dropped by a private insurer because of his house's age. His insurance premiums have gone to $1,350, from $500, Mr. Myers said, and will more than double again by the end of the summer if another Citizens rate increase is approved.
Mr. Myers, 52, said he was planning to build a home in Virginia and move there next year.
"The worst that's going to happen there is I get cold," Mr. Myers said. "I don't see it changing or getting any better here."
Suzanne Litt Lyon, whose insurer declared bankruptcy this year, has searched relentlessly to find a new policy for her eighth-floor apartment in Miami.
"I'm in a pickle," Mrs. Litt Lyon said. "I want to have it for my peace of mind, but do we really need insurance? I just spent $8,000 for storm shutters. We live in this 1961 concrete building that's a fortress. Even if you make a claim, the deductibles are so high that you don't even really make a claim."
Private insurance rates are not much cheaper. State Farm is asking to increase its homeowners' insurance rates 74 percent on average, according to the Florida Office of Insurance Regulation. Lynn Martin, a State Farm customer in Punta Gorda, said her premiums could increase to $3,000 a year, from about $2,000.
"I don't know what anyone's going to do who's a working person," said Mrs. Martin, who battened her home and survived Hurricane Charley in 2004 with relatively little damage. "Then you add in the factor of the higher cost of fuel, electricity. Where's it going to stop?"
Homeowners in some hard-hit areas have united and taken their outrage to Tallahassee, the state capital. Fair Insurance Rates in Monroe, a group formed at a backyard party in Key West, now has more than 4,000 members and successfully lobbied to have Citizens' homeowner rates in the Keys frozen at October 2005 levels until the state can review again.
Teri Johnston, president of the group, said owners of 1,500-square-foot homes there were typically seeing premiums double to $10,000 or more for wind-storm insurance. They are facing a total home insurance cost of more than $13,000 a year on average, Ms. Johnston said, or about $1,100 a month.
Their cries are being heard. Candidates in the race to succeed Gov. Jeb Bush, a Republican, have made homeowners' insurance a top campaign issue. In addition to bailing out Citizens, the Legislature set aside $250 million this spring to help property owners fortify their homes.
Mr. Polsky, president of another homeowners' group, said that was not enough or soon enough. His premium has doubled in the past year, and he faces another increase by summer's end that he does not think he can pay. Without homeowners' insurance, he said, he faces bank foreclosure.
"I may lose my house because of this," said Mr. Polsky, who has already boxed up much of his belongings in anticipation of a move. "If it increases like they propose, I don't know what we will do. Nobody will buy it in the shape it's in, and nobody can pay the insurance."
nytimes.com
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