Citizens Property Insurance Corp., run by the state, has grown beyond its means to become the leading property insurer in Florida. The bill was intended to reduce some of the insurer's exposure by allowing the nonadmitted market to take policies.

Detractors worried policy rates would increase, especially because surplus carriers are not regulated.

Miller says the state Senate attached an amendment that would have required insurers to get written prior approval from homeowners before a take-out could occur.

"It wasn't practical," he says. "That would have potentially required tens of thousands of signatures."

When the bill traveled back to the House, which had already passed the measure, they chose not to strip the amendment—effectively ending the bill's journey days before the session is scheduled to end.

The death of HB 245 did not sit well with the free-market think tank Heartland Institute.

"This would have reduced the overall exposure of Citizens, transferred that risk away from taxpayers, and decreased the likelihood or severity of every Floridian having to pay post-hurricane taxes. Unfortunately the legislature today opted against expanding consumer choice," says Christian Camara, Florida director for Heartland.

Former state legislator and Heartland senior fellow Don Brown says he doesn't think most Citizens policyholder understand they are at risk of being surcharged up to 45 percent if a storm occurs. Citizens is then able to levy assessments on most Florida policyholders.  

"Worse still is the assessment risk that will now continue for millions of non-Citizens policyholders in Florida," he says. "As for me, I've had about all the legislature's consumer protection that I can afford."