Florida's 'hurricane tax' on home and car insurance soon to disappear

By Associated Press
WINTER PARK, Florida -. Called "hurricane tax" Florida will finally get out of the insurance bills of its residents.

Citizens Property Insurance agreed Wednesday to remove a surcharge of 1 percent on residential insurance and automobile policies, including policies to people who are not even customers of Citizens.


The surcharge will end in July 2015, two years earlier than planned. Citizens officials said the assessment may end sooner because the insurer should have enough money to pay the borrowed money in 2007.

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The Citizens created by the state was forced to borrow money to pay claims after Hurricane Wilma slow heavily through South Florida for almost a decade. According to state law, citizens can place an assessment on most accounts of insurance, including auto insurance policies to cover potential losses.

But citizens - like the rest of Florida's insurance industry - was able to build a surplus, since the State has not suffered a direct hit from a hurricane since Wilma.

Citizens, with almost 934 000 insured, is supposed to be the state insurer of last resort, but now is the largest property insurer in the state.

Citizens officials estimate that it cost some extra cost Florida more than $ 1,000 since it was put into practice.

This is the second "hurricane tax" now in place that will be removed from insurance accounts.

State officials earlier this year agreed to end next year a surcharge of 1.3 per cent separately, which was also placed into accounts to pay insurance claims related to Hurricane Wilma. This surcharge, which is linked to the Florida Hurricane Catastrophe Fund, the bills will come this coming January.