HIGH COST OF INSURANCE? PASCO'S HOUSING MARKET HITS THE SKIDS. Mark Antokas.

04/05/06

INTRO: While Florida continues to be insulated from slumping real estate sales in comparison to that nationally, the State still has it’s share of dilemmas. It is not hurricanes as might be expected. Citizens Property Insurance, Florida’s insurer of last resort, has said that it needs to raise its rates statewide in order to cover losses incurred in the past two years. And one county in the Bay Area, Pasco, seems to be the target of the largest of these ratehikes. It’s all about sinkholes, and the projected ratehike Citizens proposes for homeowners in Pasco is a whopping One hundred thirty-nine percent. Couple this with higher property taxes, creeping interest rates and a sense of an overvalued real estate market, and you have a Pasco County real state market which has all but stopped. WMNF’s Mark Antokas has more. Roll Tape: “It’s a financial crisis. We are in deep trouble. The extreme case is that people are having to foreclose on their homes, because no one can afford to buy them. When they find out, when potential buyers find out how much their insurance is at their closing, they walk out.� 18sec.

SCRIPT: That was Nicole Deg, of New Port Richey. She was one homeowner incensed enough to lead a busload of about one hundred people to demonstrate at the Capitol last Tuesday. While it seemed to her that the legislature was concerned with other matters other than the skyrocketing cost of insurance in Florida, Deg feels that the trip was still a success. Roll Tape: “You know, we happened to see the Governor, he didn’t give us the time of day, I know he had other business, but our business is severe. So uh, we shouted at him we begged him to listen he didn’t. The point of our trip was to let them know were here, to put our faces or stories in their mind, to cause some waves, so we did that, that was the whole point of the protest, so we did that, it was successful.� 30sec.

Over fifteen hundred people come to Florida each day and settle into a new home. Pasco County, on Florida’s West Coast has seen prices rise dramatically in the past few years due to its lower taxes, availability of build able land and proximity to the Tampa job market. In past years, houses in Pasco typically sold on average in about one week after hitting the market, many times closing for prices higher than the asking. All that changed though, after Citizens Property Insurance announced late December of last year it would more than double the rates of Pasco homeowners covered by the insurer of last resort. Bob Memoli is a realtor in New Port Richey, where a town hall type meeting recently was held to address the issue. Roll Tape “Uh, Mark, its really hurting us badly, our sales are down forty or fifty percent, just this January we lost forty deals because of insurance� 9sec.

Representative John Legg and Senator Mike Fasano have co-sponsored three bills in this current legislative session to reform the process of evaluating sinkhole claims and reduce frivolous sinkhole claim lawsuits, another to prohibit insurance companies from “Cherry Picking� in the state, where many insurers offer auto coverage but not wind damage and sinkhole, and another bill which would insure that all counties in Florida have access to Citizen’s insurance. Representative Legg. Roll Tape: “ Senator Fasano and I have filed a few pieces of legislation that we hope will get a handle on these premiums which are really hurting our constituency in our community. What has happened is that these insurance companies have been very shrewd about how they have set up their corporations and they’ve set up separate companies that operate in Florida and basically what they’ve done is basically they’ve red-lined Florida because were an at risk state, what were looking at is if you want to offer certain types of insurance you offer in other parts of the country and you offer homeowners insurance in other parts of the country, you cant cherry pick Pasco County.� 34sec.

Mary Ellen Adams is with First American Title Insurance Company. She says that the future is bleak for the housing industry in Pasco County. Roll Tape: “ Well I think the title insurance business in combination with the mortgage industry and the real estate industry is basically at a standstill now in Pasco County, you cant get any other insurance, houses aren’t selling, ahh the selling time last year and the year before, you put your house on the market, it might sell in a week, we have houses on the market a few months, there not moving, buyers aren’t buying and were coming into the hurricane season now, so, its not going to be pretty.� 25sec.

The past few years in Pasco’s home market has seen high jumps in prices in the resale market. Prices daily had been on the rise. Today’s Pasco County market is just the opposite. Again, Mary Ellen Adams. Roll Tape: “ Yes. You’re right. Prices of houses are starting to level off a bit, come down a bit, and it’s a market correction, and we see that every once in awhile and we’ll live through it and we’ll be fine, but for the citizens of this County that have to pay higher premiums for their homeowners insurance, their hazard insurance, that are taking the hit for everybody, it really doesn’t seem to be too fair, they really need to come up with an answer to this.� 24sec.

Justin Glover is spokesperson for Citizens Insurance. He says that private companies are not willing to cover homeowners in Pasco because of severe liabilities and that the last few years have seen a spike in Citizens coverage in the Tampa Bay Area. Roll Tape: “In .2001 we only had about fifteen hundred policies in the Tampa Bay Area, now we have over a hundred-fifty thousand policies., and that’s because the private carriers have stopped writing policies and they’ve all come to the state insurer.� 13sec.

Bob Langford is Deputy Mayor of New Port Richey. He sees this as a problem affecting the most vulnerable of Pasco County’s residents. Roll Tape: “Because of the insurance increases and the property value increases, we are causing gentrification of our communities, especially here in New Port Richey where we have a lot of older residents, people on fixed incomes, middle class….were basically driving the middle class and fixed income people out of not just New Port Richey here in Pasco County, but out of the State of Florida.� 24sec.

Sock-Out: Last year at this time Pasco County had Eight Hundred unsold homes on the market. According to the West Pasco Multiple Listing Service, today’s market has in excess of Eight Thousand unsold properties, residential, commercial, and land. The Senate Banking and Insurance Commission is expected today to approve proposals to strengthen Florida’s attraction to private insurers. Citizen’s proposals are to require non-homesteaded properties to pay more for coverage, banning properties valued at more than one million dollars from Citizens, and rate relief for those who fortify their homes against hurricane damage. Reporting from Pasco County, this is Mark Antokas for WMNF radio news.

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