WASHINGTON (April 8, 2014) – Removing units from the Coastal Barrier Resources System (CRBS) will have the adverse effect of raising taxes and forcing more customers into Florida’s state-run insurer, R Street co-founder and Florida director Christian Cámara told the House Natural Resources Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs today.
Under a reform enacted last year based on an R Street proposal, Citizens Property Insurance Corp., Florida’s insurer of last resort, can not provide insurance coverage to any new development on land contained in the CRBS. This reform is meant to slow the growth of Citizens, whose policy count recently fell below 1 million for the first time since 2007.
Cámara, asked to discuss proposed legislation that would remove certain units of land from the CRBS in order to pave the way for new development, said that many of the units display the characteristics that the CBRS was designed for.
Of one unit, located in Cape San Blas, Fla, Cámara noted that, “Given its high-risk location, extreme erosion rate and the fact that residents could still obtain private flood insurance coverage at proper, risk-based rates, this land epitomizes the justification behind the CBRS, and should remain in the system.”
Removing this land from the system and allowing Citizens to underwrite new development there would put all Florida taxpayers at risk, as Florida law authorizes the company to impose a form of taxation on essentially every insurance policy in the state to cover any shortfall in its surplus in the event of a major hurricane. These assessments can increase Floridians’ overall cost of each insurance product by up to 45 percent for multiple years. Additionally, this move would undermine Florida’s own public policy goal of slowing the growth of Citizens by reopening some of the state’s riskiest areas to the state-run insurer.
Cámara stressed that the lands included in the CBRS are there because of their unique characteristics, which make them vulnerable to the storms and floods in Florida.
“The Coastal Barrier Resources Act does more than protect environmentally sensitive coastal areas and wildlife habitats. It also protects consumers and taxpayers from subsidizing the risky behavior of a few and having to cover their repeat losses,” he said.