Major Insurance-Reform May Cut Rates Up To 40%

Today, Florida lawmakers are expected to approve the latest insurance plan with the expectation of lowering homeowners insurance rates across the state. On Sunday, lawmakers agree to squeeze out extra savings for customers of government-run Citizens Property Insurance Corp. This is part of a finalized insurance package on how to balance and have immediate savings for homeowners.

Despite the last minute rush of changes on Sunday, the deal was cemented. Citizens will now have the ability to charge people who buy almost all types of insurance -- including homeowner's auto and others. In the event they should run out of money to pay claims after a storm, the state-run insurer can currently only assess people with homeowner's policies as it did after 2004 and 2005 hurricane seasons.

The final vote is expected in today and it was reported that anyone who votes against this bill is practically voting against significant relief for millions of people in this state.

Lawmakers are under intense public pressure from the new gov. Charlie Crist to lower rates. If this is successfully passed, insurance premiums would drop from as low as 5% to as much as 40% - this is refreshing news and would be a welcome relief to many homeowners who are on tight budgets.

Officials with State Farm Florida - the state's largest private property insurer, predicted that the company's more than 1 million policyholders would see an average of 7% reduction on their overall bill.

Under this plan expected to be voted on today, the state would expand the fund to $32 billion from $16 billion which would give insurance companies access to more state monies to help them pay claims in the event of another major hurricane or storm season strike.

Companies would be required to pass on all savings to policyholders - lawmakers said they would draft language to ensure that all policyholders participate in the plan.

Naturally, with anything, there are good and bad side to it. These changes to the insurance policy comes with risk too as well. Two years ago when these carriers ran out of money, they were charged to make up the difference, this led them to pass on these charges to policyholders. House Insurance Chairman Ron Reagan, R-Bradenton said that 'Everyone in the state of Florida is going to pay for it'.