Wednesday, May 8, 2013

Citizens reform to have big impact on coastal homes

Senior Reporter-South Florida Business Journal
Real estate and insurance experts say the state’s reforms to Citizens Property Insurance Corp. will have a big impact on coastal real estate in South Florida.
The legislature approved changes to the state-run insurer designed to reduce enrollment so it is not as vulnerable to a major storm. Citizens would still be limited to 10 percent annual premium hikes, but new enrollees would have to go through a "clearinghouse" of other insurers before choosing Citizens.
Jay E. Mack, CEO of Deerfield Beach-based Mack, Mack and Waltz Insurance, said rates would increase over time because homeowners in the clearinghouse would have to elect for private coverage within 15 percent of the Citizens policy.
“The prices will rise up and someday settle in to where they are actuarially sound and will attract other private insurance companies back to Florida,” Mack said.
Shares of Fort Lauderdale-based Universal Insurance Holdings (NYSE: UVE), the largest private insurer in Florida, hit a 52-week high on Friday and again on Monday in the wake of Citizens reform passing.

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