- The Citizens Property Insurance Corp. Board of Governors is considering a plan that would lead to double-digit rate increases for Florida homeowners.
- The proposed increase would be effective from November 1, with a 12% increase for those with “multi-peril” policies who live in their primary residences and a 13% increase effective from January 1.
- If approved by the Board of Governors, the plan would need further approval from the state Office of Insurance Regulation before it can take effect.
The Citizens Property Insurance Corp. Board of Governors is set to consider a plan on Wednesday that would result in double-digit rate increases for homeowners across Florida. The proposal would cause a 12 percent increase in rates, effective November 1, for homeowners who have what is known as “multi-peril” policies and whose homes are their primary residences. This is the most common type of coverage. Customers with such policies will see the increase go up to 13 percent effective January 1. However, state law sets a cap on annual rate hikes, and these increases are the maximum allowed.
The Legislature had approved a special legislative session in December that allowed the state-backed Citizens to increase rates by up to 50 percent for homes that are not primary residences. This would mean that many owners of such homes would face higher increases than the 12 or 13 percent proposed. The Board of Governors must approve the plan on Wednesday before it can take effect. If approved, the plan would also need approval from the state Office of Insurance Regulation.
Citizens Property Insurance Corp. has seen a massive increase in policyholders over the past two years, with many private insurers dropping customers and raising rates due to financial difficulties. The company had 1,223,204 policies as of last Friday, up from 1,209,713 policies the week before, according to its website. This is a significant increase from the 569,868 policies it had on March 31, 2021, and the 817,926 policies it had on March 31, 2022. Homeowners have been seeking coverage from Citizens amid a troubled insurance market.
The estimated cost of Hurricane Ian has also been increased by Citizens, now standing at $3.8 billion. The company expects to receive around 100,000 claims due to the hurricane, which devastated coastal areas of Southwest Florida. This increase in costs highlights the challenges that state-backed insurers like Citizens face in dealing with massive claims resulting from hurricanes and other natural disasters.
Last month, state regulators placed another private property insurer, United Property & Casualty Insurance Co., into receivership due to higher-than-expected losses from Hurricane Ian, which pushed the company into insolvency.