Surprise! Property insurance rates dropping

July 5, 2014 

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A car moves slowly through a flooded street in Holmes Beach in June 2013 as Tropical Storm Andrea moves over Anna Maria Island. Property owners will be paying lower premiums for property insurance in 2015. GRANT JEFFERIES/Bradenton Herald

GJEFFERIES@BRADENTON.COM Buy Photo

Citizens Property Insurance plans to drop rates next year for some 70 percent of policyholders statewide by an average of 3.2 percent -- excellent news for coastal communities such as Manatee County vulnerable to storm surge and other damage.

More than 17,500 Manatee County property owners hold Citizens policies.

Rates from the state-run insurer have increased for the past four years to "actuarially sound" levels in a strategy to shed policies and force property owners into the private market. Two years ago, Citizens held 1.5 million policies, but today the number is down to less than 930,000.

The tactic has worked, thus reducing the risk of surcharges in the event of a catastrophic disaster that devours the billions Citizens currenly holds.

Even a handful of private insurers intend to drop rates next year. After eight years without a hurricane, that only seems proper. Those companies should hold some fat bank accounts just like Citizens.

The troublesome thing, though, is about a dozen private insurers went belly up during our hurricane-free seasons -- companies that state regulators found to be sound. Where'd policyholder money go? Into the pockets of overpaid executives who then bankrupted the company?

While we celebrate lower property insurance rates, the state must do a better job protecting policyholders from profiteers.

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