Homeowners can expect a percentage increase on their home insurance in the near future, officials have announced.
The purpose of the new fee is to support the settlement of claims of insolvent companies. But critics say it shifts the burden of payment from the state to individuals.
The fee applies to all Florida homeowners who can expect their home insurance to be increased by one percent to help businesses unable to pay their debts.
If a homeowner has an annual insurance policy of $4,000, a one percent tax share would cost an additional $40 per year.
Several homeowners oppose the new fee, saying it only serves to help the state settle its own claims.
“I’ve seen an increase,” homeowner Gloria Smith told Fort Meyers NBC affiliate WBBH-TV.
“We already pay enough for insurance, and now I have to pay for everyone else’s claims? I don’t agree with that.”
Still, state Insurance Commissioner Mike Yaworsky approved the one percent emergency rating, which is set to take effect in early October.
Reid McDaniel of McDaniel Insurance Solutions said when the fee goes into effectMonth and a policy renews in November, some homeowners may not see the cost until 2024.
The fee comes as homeowners are hit by rate hikes in June, McDaniel said.
“With insurance rates rising, you may not even notice 1 percent at this point,” he warned.
Some homeowners see the new fee as a rescue for insurance companies.
“It’s a bailout, but not for the insurance company because they’ve already gotten out of the business,” McDaniel said.
He added that the bailout was intended for homeowners who were left empty-handed last year when seven insurance companies in Florida went bankrupt.
The emergency rating does not apply to car insurance.