What You Need to Know About Florida’s New “Hurricane Tax”

The home insurance industry is still reeling in Florida — and the nation’s biggest insurers are trying to figure out how to stay profitable. One company has come up with an idea that will undoubtedly solicit a collective groan from policyholders: A so-called “hurricane tax.” But what exactly is a hurricane tax? How would such a thing work? And what can you do if you’re still trying to get compensation for damage caused by Ida or Nikol? Let’s find out:

Citizens Insurance Announced New Hurricane Tax

Citizens Insurance is the state’s biggest insurer, and it has announced a “surcharge” for home insurance that some people are already called a “hurricane tax.” The company has stated that if the state faces another major storm this year, policyholders would be forced to pay an additional surcharge when filing claims for damage to their homes, cars, and even boats. This tax would probably amount to a charge of about 2%. And when you’re talking about homes that are worth millions of dollars, this can really up.

Even as they announce this plan, Citizens and many other providers are hiking premiums to the tune of tens of percentiles. Some could face a 45% increase, but the normal rate for Citizens policyholders is 15%. This is despite the fact that rate hikes were capped at 10% back in 2009. Citizens received special permission for higher rate hikes from the Florida government.

The purpose of this rate increase is to build up a fund that could cover losses in the event of another major storm. If the fund is depleted, the 2% “hurricane tax” would kick in. One thing is clear — insurance is going to cost us a lot more in the Sunshine State — and that’s before this new “hurricane tax” even kicks in.

A spokesperson for Citizens stated:

“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.”

It is widely accepted that Citizens is operating at a loss. They’re running out of money, and this certainly isn’t good news for many policyholders across the state. Some are calling for the government to step in, but the current administration has already faced criticism for bailing these companies out and not letting the “free market” run its course.

Hurricane Ian wiped out $2 billion of its surplus, leaving it with just under $5 billion. Although this might sound like a lot of money, consider the fact that Hurricane Ian caused well over $100 billion in damages. And that was just one storm.

Where Can I Find a Qualified Hurricane Insurance Lawyer in Trenton?

If you’ve been searching for a qualified, experienced insurance claims attorney in Trenton, look no further than the Shochet Law Group. We know that it has become more difficult than ever before to insure your property in Florida. It doesn’t help if you’re still trying to get compensation for damage caused by Ida or Nikol. Book your consultation today, and we can help you pursue compensation more effectively — even if your claim has already been denied.

Sources

1. https://nbc-2.com/news/state/2023/03/30/citizens-insurance-announces-that-florida-residents-could-face-hurricane-tax/
2. https://www.insurancebusinessmag.com/us/news/property/citizens-wants-to-increase-rates-avoid-hurricane-tax-441231.aspx

Shochet Law Group

409 N. Main Street
Trenton, FL 32693
(352) 354-4518 or (877) 548-9888
[email protected]

If you have further questions about this article or legal concerns, call 800-672-3103