CITIZEN'S INSURANCE HEARS PASCO COUNTY CONCERNS ON RATES. Mark Antokas

03/01/06

INTRO: Citizens Property Insurance, Florida’s insurer of last resort, has said that it needs to raise homeowner and business policy premiums in order to cover losses incurred in the past two years. But it is not due to an increase in hurricane activity as one might expect. It is sinkhole claims, mainly in Pasco and Hernando Counties, which has prompted a further increase in its rates by more than one hundred thirty nine percent for all those living west of Little Road in Pasco County. Couple this with higher property taxes, higher interest rates and overvalued property values, some in the bay area are hopping mad and demanding action in the legislature. Today, Citizens Insurance, local and statewide politicians as well as a host of realtors and the homeowning public gathered at State Senator Mike Fasano’s request in New Port Richey to vent. WMNF’s Mark Antokas was there and files this report.

SCRIPT: It was in Senator Fasano’s words, “The largest town Hall meeting� that he has ever seen. An estimated fifteen hundred people gathered at the Spartan Manor in New Port Richey today to demand to be heard on their concerns about the astronomic property hikes proposed by Citizens Insurance. While Senator Fasano and State Representative John Legg have introduced legislation to limit Citizen’s to covering properties valued at under one million dollars, and to those properties which are homesteaded, others see this issue as a political opportunity. Chief Financial Officer Gallagher who is running for the Republican nod for the Governors seat made a surprise appearance. Roll Tape:

Gallagher: "These are tough times. The property taxes have gone way out of commission across the state. I announced my economic policy yesterday and included limits on the increases in property taxes by local goverments and so we hope that some of these things in my economic policy will be able to put in place when, in fact, when I'm governor in Oh-seven."

Antokas: "It's been said that the insurance companies are making money on people outside of Florida, and they are pushing all these things on citizens. How do you feel about that?"

Gallagher: "We what happened is, back in 1996, I would not allow insurance companies, insurance companies wanted to set up [inaudible] and have just companies just in Florida, and be a separate company and I would not let them do it. And then, they were allowed to do it when I was gone, in 1996, the insurance commissioner allowed them to have pups [? -- inaudible to me]. Once they did that, that company alone stands on its own and it only insures Florida. So they lose money in Florida, they keep raising the rates, yet the parent company keeps telling the investors how much money they're making. And we're getting the short end of the stick here in Florida and I wish it had never happened, you can't get the genie back in the bottle. They should have never let those companies set up small Florida companies and let them set the rates based on the losses in Florida and that's exactly what they've done. I'm very disappointed in it."

Antokas: "Gallagher was one of the first speakers. He spoke of his plans for the future, using the the insurance industry and its problems as a backdrop for his campaign, prompting senator Fasano to cut him off after 15 minutes, saying the meeting was to hear the public's view on the issues. Gallagher left immediately after his remarks, prompting this from Fasano:

Fasano: "Uh, Commissioner Gallagher -- Is he still in the building? I hope he'll join us. Has he left already?"

[unidentified:] "Uh, Treasuerer Gallagher had previously committed to an organization a group when senator Fasano offered the invitation, so he told --"

Fasano: "Uh, I didn't -- Ladies and gentlemen, let me impress something to you: I didn't invite any member of the cabinet because if I did, they would have come here they would have been here exactly what Mister Gallagher just did, they would have given you five or ten minutes of Tallahassee rhetoric and then leave."

[applause]

Fasano: "That is why I asked if he would be willing to stick around and listen -- listen -- to the people who pay his salary, who elect him or others to office and he chose to leave."

Antokas: "Bob Langford (sp?) is deputy mayor of New Port Richey. He spoke giving practical reasons for Pasco's sinkhole problem."

Langford: "If we really have a sinkhole problem here in Pasco County, I don't believe myself that it's just Pasco County's fault. We're sucking water out of the county here and sending it to Pinellas County, Hillsborough County, and all these other areas. We're not just taking care of ourself here. We're taking care of all these other counties, too. They're not being penalized for the sinkholes they're helping create, probably more than we are."

Antokas: "Meanwhile, the Cypress Creek Town Center, along with other new building projects in the county, been given the go-ahead to drain more than 56 acres of wetlands. Some people in the crowd blamed bogus sinkhole claims on the rate hikes."

[unidentified] "These sinkholes, they're causing a lot of our problems. I know a person down the street who got a sinkhole claim. He said, 'hey, go see this lawyer here, he gets it done to you real fast.' These people don't even come out and look at the place. It'll sail right through and that's why we got a lot of sinkhole claims that wasn't justified and now we have the problem."

Antokas: "Another man in the crowd wanted to know what plans Citizen had to provide affordable insurance to those being forced out of their homes by rising homeowner expenses."

[unidentified] "If we have to move out, what are you going to do immediately to assist us with insurance so the people we sell our homes to can buy them and get insurance?"

[unidentified] "Well in response, let me say this: I know historically, based upon 2004, the situation was an absolute mess. The complaints were in the thousands, and rightfully so. I took office as chair in August, 2005. I think we've done everything we can do to begin to restore their trust in Citizens. The one thing we cannot do is keep the rates down in relation to the risk, and the claims are being paid, because it will come back to you in the form of an assessment. What we need to do is control the outlandish settlement of claims in Pasco and Hernando for sinkholes. We need to do that."

Fasano: "Am I incorrect or correct that Citizens can no longer insure the property for sinkholes? Hold on, hold on, David Fisher."

Fisher:[?] "That's correct, the policy limits have been paid."

Fasano: "Ladies and gentlemen, remember this, that if you go to an attorney, and you file a sinkhole claim, and you have Citizens, and the attorney convinces you to go for the limits, and you get the limits from Citizens, and Citizens will never insure that property again."

[unidentified] "They're asking why?"

Fasano: "Go ahead Mister Douglas."

Douglas: "If you get stopped three times for DUI, why do they send you to jail?"

[audience negative reax]

Douglas: "Why do you pay -- wait, wait, wait a moment."

[audience reax louder]

Douglas: "wait a moment. If you get the full settlement on your home, why would we insure you again -- same piece of property?"

Antokas: "Douglas is chairman of Citizens' Board of Directors. According to a recent report given to Citizens, more than two thirds of the 95 million dollars paid out in sinkhole-related claims by Citizens since 2002 has been in Pasco County. Sinkhole policies in the Tampa Bay area have blossomed from 1,000 in 2001 to more than 150,000 in 2005. Capping sinkhole claims to $10,000 is on the table at Citizens. Reporting from Pasco County, this is Mark Antokas for WMNF radio news." -30-

"It was, in Senator Fasano's words, the largest town meeting he had ever seen." An estimated 1500 people gathered at the Spartan Manor in New Port Richey today to demand to be heard about their concerns about the astronomic property hikes proposed by Citizens Insurance. While Senator Fasano and State Representative James Legg have introduced legislation to limit Citizens to covering properties valued at under one hundred million dollars and to those properties which are homesteaded, others see these issues as a political opportunity. Chief financial officer Gallagher, whose running for the Republican "nod" for the governor's seat, made a surprise appearance."

"These are tough times; the property taxes have gone way out of commission across the state. I announced my economic policy yesterday and included the limits on property taxes by the local governments, and so we hope some of these things in my economic policy will be put in place when in fact I'm governor in '07."

"It's been said that the insurance companies are making money outside of Florida; and they're pushing all that on citizens. How do you feel about that?"

"Well, what happened is back in 1996, I would not allow insurance companies; insurance companies wanted to set up "pups" and have just companies in Florida and be a separate company and I would not let them do it. And then, they were allowed to do it when I was gone; in 1996 the insurance commissioner allowed them to have "pups." Once they did that, that company alone stands on its own and it only insures Florida. So they lose money in Florida, they keep raising the rates, yet the parent company keeps telling all the investors how much money they're making, and we're getting the short end of the stick here in Florida; and I wish it had never happened, you can't get the genie back in the bottle. The should never have let those companies set up small Florida companies and set the rates based on the loses in Florida and that's exactly what they've done; I'm very disappointed in it."

"Gallagher was one of the first speakers. He spoke about his plans for the future of Florida using the insurance industry and its problems as a backdrop for his campaign prompting Senator Fissano to cut him off after 15 minutes, saying the meeting was to hear the public's view on the issues. Gallagher left immediately after his remarks prompting this from Fasano."

"Gallagher was one of the first speakers. He spoke about his plan for the future of Florida using the Insurance industry and its problem as a backdrop for his campaign, prompting Senator Fasano to cut him off after fifteen minutes, saying that the meeting was to hear the public’s views on the issue. Gallagher left immediately after his remarks, prompting this from Fasano. Roll Tape:

"Commissioner Gallagher, is he still in the building? I hope he'll join us, has he left already?"

"Treasurer Gallagher had previously committed to an organization, a group when Senator Fasano offered the invitation..."

(Interruption)"Ladies and Gentlemen, let me impress something. I didn't invite any member of the cabinet because if they had come here they would have given you exactly what Mr. Gallagher did, give you five or ten minutes of Tallahassee rhetoric then leave." [clapping]"That is why I asked if he would be willing to stick around and listen, listen! to the people who pay his salary and elect him and others to office and he chose to leave."

Bob Langford is Deputy Mayor of New Port Richey, he spoke, giving practical reasons for Pasco’s sinkhole problem. Roll Tape:

"If we really have a sinkhole problem here in Pasco County, I don't believe myself that it's just Pasco's fault; we're sucking water out of the county here and sending it to Pinellas County, Hillsborough County, and all these other areas. We're not just taking care of ourselves, we're taking care of all these other counties too. They're not being penalized for the sinkholes that they're helping create, probably more than we are."

Meanwhile, the Cypress Creek Town Center has, along with other new building projects in the County, been given the go ahead to drain more than 56 acres of wetlands. Some speakers in the crowd blamed bogus sinkhole claims on the ratehikes. Roll Tape:

"These sinkholes that are creating a lot of problems...I know a person down the street that got a sinkhole claim, he said, 'hey go see this lawyer here, he gets it done real fast, these people don't even come out and look at the place, just sail right through; and that's why we got a lot of sinkhole claims that wasn't justified and now we have the problem."

Another man in the crowd wanted to know what plans Citizens had to provide affordable insurance to those being forced out of their homes by rising homeowner expenses. Roll Tape:

"If we have to move out, what are you going to do immediately to assist us with insurance so the people we sell our homes to can buy them and get insurance?"

"In response, let me say this. I know historically, based on 2004, the situation was an absolute mess. The complaints were in the thousands and rightfully so. I took office as chair in August of 2005. I think we've done everything we can do to begin to restore the trust in citizens. The one thing we cannot do is keep the rates down in relation to the risk and the claims being paid because it will come back in the form of an assessment. What we need to do is to control the outlandish settlement of claims in Pasco and Hernando for sinkhole. We need to do that."

"Am I correct or incorrect that citizens can no longer insure that property for sinkhole?" "Hold on hold on. David Fisher."

"That's correct."

"Rember this. That if you go to an attorney and you file a sinkhole claim, and you have Citizens insurance, and the attorney convinces you to go for the limits, and you get the limits from Citizens, then Citizens will never insure that property again."

"They're asking why?"

"Go ahead Mr. Douglas."

"If you get stopped three times for DUI, why do they send you to jail? [audience interruption]

"Now wait a moment, wait! If you get the full settlement on a home, why would we insure you again, same property?" [clapping]

Douglas is chairman of Citizens board of directors. According to a recent report given to Citizen’s, more than two-thirds of the $95million dollars paid out in sinkhole related claims by Citizens since 2002 has been in Pasco County. Sinkhole policies in the Tampa Bay Area have blossomed from one thousand in 2001 to more than one-hundred-fifty thousand in 2005. Capping of sinkhole claims to $10, 000. is on the table at Citizens. Reporting from Pasco County, this is Mark Antokas for WMNF radio news.

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