WEST PALM BEACH, Fla. — U.S. Sen. Sheldon Whitehouse, D-RI, told WPTV concern over Citizens Insurance's ability to pay claims after a major storm goes beyond Florida.
He quoted the government backed mortgage agency Freddie Mac said the potentially risky footing of both Citizens, and private insurers of coastal property foreshadows a crisis.
“This predicted property values crash that Freddie Mac has written about is beginning to get underway first in Florida and that risk is cascading into a worst crisis first in Florida and out of Florida in coastal property value losses up and down our coasts even to my home state of Rhode Island,” Whitehouse, who is the chair of the Senate Budget Committee, said.
He said the rising cost of property insurance is a major budge issue. Insurers of coastal properties are charging more than ever. They set prices by the risk associated with hurricanes that seem more frequent and powerful, floods that seem more common, and shorelines disappearing because of rising sea levels.
“There’s a core underlying reason for the insurance problems that Florida’s experiencing right now and for the risks it faces,” Whitehouse said. “And that is the persistent failure to deal with the problem of climate change.”
Whitehouse is concerned that Citizens may not be able to pay claims resulting from a major hurricane striking Tampa Bay or South Florida.
Citizens Insurance spokesperson Michael Peltier responded to the Senate investigation with the following via email:
“Citizens is preparing its response to the Senate Budget Committee, but it is important for Citizens’ policyholders, and all Floridians, to know that Citizens is structured under Florida law so that it will always be able to protect its customers and pay claims.”
Meantime, Whitehouse said Florida is just the tip of the spear in a growing nationwide insurance crisis.
Wildfires in California have upended the insurance market in that state too.