Citizens high-risk rate increase approved
Citizens high-risk rate increase approved
By MICHAEL PELTIER | THE NEWS SERVICE OF FLORIDA
TALLAHASSEE — Business and home owners living in high-risk areas and getting their insurance from state-run Citizens Property Insurance will see their rates increase 5.2 percent beginning in January, state regulators ruled Friday.
Ten days after getting public input on the request, the Office of Insurance Regulation approved rate hike increases for Citizens high risk accounts, a pool of more than 300,000 policies for homeowners, condominium owners and commercial property owners.
The rate filings begin what company officials and lawmakers envision as a “glide path” toward higher rates for Citizens, the state’s property insurer of last resort. Those rates have been capped the last couple years because of increases after two heavy hurricane seasons that lawmakers thought were too difficult for home owners. Now, policy makers are trying to get rates back to where the actuaries say they should be.
Along with homeowners rates, Insurance Commissioner Kevin McCarty approved premium increases for commercial residential policies of 9.4 percent, commercial non-residential, 9.3 percent and mobile homes, 11 percent.
While lawmakers this year approved increases for Citizens, they limited annual adjustments at 10 percent increases for most policyholders. Citizens is Florida’s largest property insurer with more than 1 million policyholders.
The 10-percent cap, however, does not include a provision to accelerate cash build up in the hurricane insurance pools. That’s why the mobile home rate increase will exceed 10 percent on average.
Friday’s approved rates were lower than what had previously been requested by Citizens.
Posted several weeks ago, the original proposed rate hikes would have increased homeowners rates by 7.5 percent. Other increases included 9.6 percent for commercial residential; 9.9 percent for commercial non-residential property, and 11.8 percent for mobile home owners in the state-run pool.
McCarty also said the agency would look into claims by Monroe County residents that their rates are too high. During public testimony, a cadre of Monroe County homeowners said the Florida Keys represent a unique landscape and operate under a stricter building code. The combination renders inappropriate the model used by the state to set insurance rates for policyholders of Citizens Property Insurance Corp.
Citizens, the only insurer that provides wind insurance for the 100-mile strip from Key Largo to Key West, is charging too much for coverage residents don’t need, they say.
