In response to a recent Palm Beach Post article that questioned the substantiality of post-hurricane tax assessments, Citizens Property Insurance Corp. President and CEO Barry Gilway authored a letter to the editor in an effort to clear up the misconceptions regarding the state’s assessment risk.
“Assessments are not a scare tactic. They are a real possibility, based on hard dollars and statistics,” said Gilway. According to Gilway, “assessments could climb as high as 45 percent of premium for a Citizens policyholder and 2 percent of premiums for a non-Citizens policyholder. On a $2,000 policy, that would be $900 and $40, respectively, for a single year. If that were not enough to cover the shortfall, additional emergency assessments could be charged to all Florida policyholders over multiple years.”
While not mentioned in the letter, it is also important to note that storms that are likely to deplete Citizens’ funds and trigger assessments by it are likely to have a similar impact on the Florida Hurricane Catastrophe Fund, triggering additional post-hurricane tax assessments and reducing the Fund’s ability to meet its obligations for subsequent storms.
