Item M16
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: Wed.. March J 5. 2006
Division: BOCC
Bulk Item : Yes
No XX
Department: Commissioner David Rice. District 4
Staff Contact Person: Tamara Lundstrom
AGENDA ITEM WORDING: Approval of Resolution recommending specitic reductions to
Citizen's Property Insurance rates reftective of actual costs.
ITEM BACKGROUND: The net effect of the recommended reductions from the Citizen's rate
computations should reduce rates commensurate with the 2005 rates.
PREVIOUS RELEVANT BOCC ACTION:
CONTRACT/AGREEMENT CHANGES:
STAFF RECOMMENDA TIONS:
TOTAL COST:
BUDGETED: Yes
No
COST TO COUNTY:
SOURCE OF FUNDS:
REVENUE PRODUCING: Yes
No
AMOUNTPERMONTB_ Year
APPROVED BY: County Atty _ OMBlPurchasing _ Risk Management_
DIVISION DIRECTOR APPROVAL:
!bauid !J. 9lk.e
(David P. Rice, Commissioner)
DOCUMENTATION:
Included XX
Not Required_
DISPOSITION:
AGENDA ITEM # r i
. I
Revised 2/05
CO--I..lo.... Rice
RB8OLUTlOR RO.
A RB8OLUTIOK OJ' TIIB BOARD OJ' COUlfTY
00.1118810_ 01' .ODOB COnTY RBC01IDD'~IIfG
SPBCU'IC REDUCTlOR. TO CITIZBlf8 WDm8TORII
11f8URAlfCB RATB8 DJU!lCTIVB 0.. ACTUAL COSTS.
WIIBRBAS, a group of concerned citizens F.I.R.M, (Fair Insurance Rates
for Monroe County) has brought countywide attention to the fact that there is a
windstorm insurance premium crisis in Monroe County; and
WIIBRBAS, the cost-of-living in Monroe County is the highest in the State
of Florida; and
WIIBRBAS, a home in Monroe County with an insurable value of
$350,000 in 2005, on average paid $5,747 for windstorm insurance, will in 2006
pay nearly double at $10,539 annually or $878.26 per month for windstorm
coverage after Citizen's Property Insurance proposed rate increase. The net
annual cost of windstorm insurance on the $350,000 home would be in the
range of $17,539 to $28,039, if the deductible of 2% or 5% is included in the
cost of the insurance; and
WH&RMS, a school teacher, law enforcement officer, government
employee. social worker. nurse, fisherman or fIXed-income retiree who owns a
home in the Florida Keys does not have sufficient income to pay the current
windstorm premiums much less the substantial increase proposed by Citizen's
Property Insurance, and may have to consider moving from the Keys; and
WHBRBAS. there is an affordable housing crisis in the Keys and a
shortage of affordable rental housing, and any increase in windstorm premiums
no doubt will be passed-on by landlords to their tenants resulting in even higher
residential rental rates; and
WHBREA8~ the building codes in Monroe County were for many years
much more stringent than in other parts of the State and consideration of the
heightened building code standards should be incorporated and heavily
weighted in the calculation of windstorm rates; and
WHERBABt the deductibles on windstorm policies are so high the
homeowners generally are unable to make claims for windstorm damage or to
pay for windstonn repairs, thereby making windstorm policies impractical and
unaffordable; and
WllBRBAS. the dramatic increases in windstorm insurance premiums will
result in fewer people purchasing windstorm insurance if they are not required
to have casualty insurance, with the result that catastrophic windstorm damage
to those homes will either not be repaired or in many instances will be repaired
at the expense of local, state and federal government taxpayers; and
Rale reduction
1
W1IBRBA8, the history of the last two years reflects that the entire state of
Florida is vulnerable to windstorm damages, especially those parts of the state
where hurricane shutters and other stonn-proofing techniques are not in
common practice; and
WHEREAS. the State of Florida has estimated that the State has and will
receive a "windfall" sales tax revenue in excess of $3 billion from hurricane
rebuilding efforts;
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISS10NERS OF MONROE COUNTY, that:
1. The Board of County Commissioners of Monroe County requests that in order
that windstorm rates be commensurate with the 2005 rates reductions should
be made to Citizen's rate computation to address the following additional costs:
A. INDUSTRY EXPENSE EQUAUZATION FACTOR should be reduced to the
17% overhead which Citizen's actually experiences, not the expense load of other
property insurers in Florida, which should render an estimated. savings of 10-
15%; and
B. ASSESSMENT REDUCTION PROVISION, a fee which was included to
reduce the probability and severity of future assessments but for which there
has been no substantiation, which would have impacts ranging from
approximately 11 to 20%.
2. The Clerk shall send a copy of this resolution to the Honorable Jeb Bush, the
Honorable Charlie Crist, the Honorable Tom Gallagher, the Honorable Charles
H. Bronson, State Senators Larcenia Bullard and Rudy Garcia, State
Representatives Ken Sorensen and Dennis Ross, and the Board of Directors of
the Citizens Property Insurance Corporation.
3. This Resolution shall become effective on the date adopted.
PASSED AND ADOPI'ED by the Board of County Commissioners of Monroe
County, Florida, at a meeting of said Board held on the flfteenth day of March,
A.D. 2006.
Mayor Charles "Sonny" McCoy
Mayor Pro Tem Murray Nelson
Commissioner George Neugent
Commissioner David Rice
Commissioner Dixie Spehar
I Seal)
Attest: DANNY L. KOLHAGE, Clerk
BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA
By:
By:
Rale reduction
2
Mayor (Chairman
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Deputy Clerk