MORTGAGE RATES FLORIDA

No one expects any type of legislation to go through without the opposition stepping up to the bat to argue their case. That's immediately obvious when you look at the divided camps on either side of HB447, which is expected to have a dramatic effect on Florida's homeowners insurance rates.

"Senator Bennett was asked why the bill is needed, given the current negotiations to keep State Farm in the market that involve the Governor's Office and the Florida Office of Insurance Regulation ("OIR")," say reporters from CFTNews.com. "He replied that consumers should be able to decide what they want to pay for their policies.  To illustrate, he used the analogy of consumers being allowed to pay extra money for a Lexus that is really just a high-priced Camry.  Consumers should be allowed to make the same choice about the purchase of insurance, he explained."

Through HB447 insurance companies would enjoy the partial deregulation of their insurance rates by permitting them to raise their rates above current state regulatory standards. This is supposedly designed to give consumers more choices with regard to their Florida homeowners insurance, as illustrated in the example above, as well as encourage companies to come into the playing field that would make it easier for high risk properties to be matched with the right option for their home insurance needs.

Right now, studies show that 102 out of Florida's 201 homeowners insurance companies are losing money, and that's without any major storms this year. If another hurricane strikes the coast companies could find their finances stretched beyond their capabilities.

Consumer groups opposing the bill argue that HB447 is actually going to accomplish precisely the opposite of what they intend it to do, restricting consumer's ability to find affordable, high quality home insurance rather than propagating it. By deregulating the rates, they argue, state officials are actually making it possible for insurers to "pick and choose" their clientele, insuring smaller numbers of homeowners and compensating by raising their rates and enjoying increased income from a "low risk" clientele.

The bill has the potential to leave lower income homeowners struggling to maintain their coverage, particularly if companies do as they're expected and jump on the consumer's choice bandwagon.

'Normally, if a seller of a product asks too much for it, the consumer can walk away,' consumer groups write. 'But home insurance is not like that. Lenders require maintenance of hazard insurance as a condition of keeping the mortgage effective.'

The question is, who's right? Is HB447 the answer Florida homeowners are waiting for or a ticking time bomb? Only time will tell.