Citizens insurance: Pay 9 percent more, Palm Beach County homeowners

June 22--Despite almost 11 years without a hurricane, one of Florida's two biggest insurers wants customers to pay an average of 6.8 percent more statewide -- and Palm Beach County wallets are targeted for an even bigger hit.

The average premium would jump 9 percent to $2,668 from $2,448 for a standard HO3 homeowner policy in Palm Beach County if regulators sign off on a proposed increase approved by the board of state-run Citizens Property Insurance Corp. on Wednesday.

Company officials again blamed the 2017 rate hikes on the rising cost of non-storm claims such as plumbing leaks.

So is the company expecting to lose customers to competitively-priced private insurers? Guess again.

In spite of the proposed hikes, Citizens expects to reverse a major trend since 2012 and actually gain customers by 2017, executives said a day earlier.

Reason: Private competitors such as Heritage Property & Casualty Insurance Co. want to raise rates even more -- up to 25 percent in parts of South Florida in its case, and 14.9 percent statewide. That tops Citizens rate hikes, which are capped by law at 10 percent.

The Citizens rate request is subject to review by the state's Office of Insurance Regulation this summer. Florida's insurance consumer advocate Sha'Ron James also has called for a hearing to give full scrutiny to the Heritage request, though state officials have not announced one so far.

The reasons for Heritage's rate increase are not entirely clear. Its claim losses have been falling as a share of premiums, The Palm Beach Post reported.

"We don't want to raise rates, but we must respond to the actuarial data," Citizens chairman Chris Gardner said Wednesday. "Unfortunately, our policyholders are being required to pay higher rates because of inflated claims, increased litigation and abuse. We can't keep asking them to do that."

Citizens officials have said little about another factor crimping its budget -- offshore reinsurance that accounts for close to one in five premium dollars its customers pay. Citizens, which has a big surplus of more than $7 billion plus the backing of a state hurricane fund with $17 billion at hand to help cover claims, did not buy foreign back-up coverage at all five years ago.

The company found itself locked into multi-year deals for the offshore coverage, though its risk exposure has fallen sharply as it shrunk to less than a third of its peak size. Officials said Wednesday the offshore spending is now about $180 million.

Citizens has reduced its customer count from a high near 1.5 million in 2012 to about 490,000, mostly by way of tranfer offers from private companies such as Heritage.

"When we forecast 2017, we're actually forecasting a slight increase in policy count," Citizens CEO Barry Gilway said Tuesday.

___

(c)2016 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by Tribune Content Agency, LLC.