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Homeowners Discover that State-Run Insurers Can Be Bullies Too

Floridians have been taught to believe that insurance companies are evil by their governor (and U.S. Senate wannabe) Charlie Crist.

In 2007, when Crist froze rates at state-run insurer Citizens Property, Floridians signed on the dotted line to join this home insurance program, boosting what should have been an insurer of last resort to the biggest property insurer in the state, with almost one-fourth of total market share.
Then in 2009, when State Farm, the largest home insurer in the country, decided it had enough of competition from the state government and got out, Crist politely said, "Good riddance."

But now Citizens Property is saying "no more Mr. Nice Insurer." Starting in 2010 rates will go up 10 percent a year until they are comparable with private insurers like Allstate. And the state-run company is also sending out tough-sounding letters ordering policyholders to shape up or ship out.

Citizens is warning that homes with a replacement value of more than $750,000 won't be insured unless they have storm shutters to protect their windows. It also won't renew policies on homes with shingle, asphalt or tar and gravel roofs more than 25 years old, which covers a lot of the state's homes. Even tile roofs have to be less than 50 years old, or need to be checked by a licensed contractor at a hefty cost to the homeowner.

In addition, Citizens Property is demanding that homeowners buy sufficient insurance to rebuild their homes if they are destroyed. Purchasing more coverage means higher premiums and, obviously, more money for Citizens.

Of course, no one has to stay with Citizens Property. Floridians can go with any of the state's insurers, who've been raising rates all along so they are now much higher.

Even insurance agents are moaning about the new rules, according to the Miami Herald. "In the current economic climate, how many people out there have enough extra cash ... to get new roofs and purchase shutters?" said one.

Floridians should consider ousting Charlie Crist and bringing in Connecticut Attorney General Richard Blumenthal. When insurers in his state tried to insist on shutters, he fought them in court and the legislature. Now there's someone who won't shut-ter out the people.

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