Over the last several years, there has been an astronomical increase in fees by both brokers and carriers both in the surplus market and by Citizens. As the miscellaneous fees increase so do the surplus lines tax and service office fee as well.

In one example a policy holder with a $21,000 premium has the following additional fees and taxes:

  • Miscellaneous carrier fee          $500
  • Policy fee                                            $250
  • Surplus lines tax                             $1,074
  • Service office fee                           $13

That’s $1,837 in fees and taxes.

The fees and surcharges are not limited to surplus lines only. Here is an example from a Citizens policyholder with a premium of $17,291:

  • 2023-A Florida Insurance Guaranty Association (FIGA) Emergency Assessment        $173
  • Catastrophe financing surcharge           $2,594
  • Tax-exempt surcharge                                  $303

That’s $3,070 in fees and surcharges.

Around the country, state legislatures are cracking down on so-called junk fees.

“Junk fees are unexpected and often hidden charges that companies pile on to all sorts of products and services, just because they can,” explained State Rep. Michele Grim of Ohio. “Charges that have no connection to anything and no justification other than corporations wanting more of our money.” 

FIRM’s President Mel Montagne has expressed his concerns to Insurance Consumer Advocate Tasha Carter. In an email to ICA Carter, Montagne suggested “…it is time to reinstate maximum fees as we had in past years.” In the first example the fees are 3.6% of the overall premium and then taxes and fees on top of that.

The Florida Surplus Lines Office is a good place to start to ask what that office has seen regarding the fees and how much additional revenue this has generated. Are they able to tell us on a year-by-year basis how much is being charged in fees?

Since the non-admitted carriers are free from rate and form filings, these fees have grown at an unprecedent rate with no end in sight. With the proliferation in Florida of the Excess & Surplus lines market—the specialty market that insures what standard carriers will not—now is the time to rein in these fees.

As for Citizens fees, the tax-exempt surcharge is just another profit center for Citizens. All for profit Insurers are required to collect a state tax for each policy they write in Florida. Although Citizens is a tax-exempt entity, this 1.75 percent surcharge is required by law so Citizens can maximize financial resources to pay claims. Instead of being a pass-thru to the state, the money stays with Citizens and as premiums increase so does the surcharge.

What is the “catastrophe financing surcharge,” and how is it calculated? Is it on every Citizens policy?

Citizens rate cap, now at 14% for 2024 renewals, is meant to keep Citizens insurance affordable for its policyholders, particularly those who have no other alternative to Citizens like Monroe County. With year after year increases right up to the allowed maximum increase, the fees add a significant amount to the overall increase.

Do you have questions about the fees on your policy? Ask your insurance agent to go over them with you.

Contact your State Legislators and the Insurance Consumer Advocate and let them know that you would like more transparency and controls put in place.

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