The Office of Insurance Regulation is considering double-digit rate increases for Citizens Property Insurance customers across Florida.
A new state regulation allows homeowner’s insurance rate increases of up to 50 percent for properties that are not a primary residence. That means the homeowner does not occupy the property 9 months out of the year. Citizens is intended to be a last resort for homeowners and often charges lower rates than other companies. Community advocacy group Fair Insurance Rates in Monroe asked regulators to deny rate increases for the Florida Keys. Joe Walsh is a board member and commented at yesterday’s public hearing that Citizens rate hikes will set the price for premiums for the whole industry.
“I think that if you’re increasing for Citizen’s, almost guaranteed you’re going to be increasing for everyone else.”
State leaders have long sought to shift policies out of Citizens into the private market, at least in part because of financial risks if the state gets hit by a major hurricane or multiple hurricanes. Tim Cerio is the president of Citizens.
“Policyholders in the private market face the risk of having to pay Citizens’ assessments, in addition to their already higher premiums. That is fundamentally unfair.”
Citizens has seen its number of policies more than double during the past two years to 1.3 million as of last week. Regulators typically take weeks to decide whether to approve such proposals. Private insurers have dropped hundreds of thousands of policies in the last several years, causing many homeowners to go to Citizens. The most common coverage has a 12% rate hike proposed; the highest amount allowed under the law for this year. The public can comment at ratehearings@floir.com until June 22nd.
This story included information provided in part by News Service of Florida.
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