Citizens Insurance rates to decrease in South Florida, DeSantis reveals

Ron Hurtibise, South Florida Sun-SentinelSouth Florida Sun Sentinel

Most customers of state-run Citizens Property insurance Corp. in Broward and Miami-Dade counties will see substantial rate decreases this year, Gov. Ron DeSantis announced Wednesday.

DeSantis said that Citizens will “very soon” announce that 52% of Broward County homeowners will see average decreases of 4.5% and 73% of Miami-Dade homeowners will see decreases averaging 6.3%.

The two counties make up a large portion of Citizens’ book of business. As of Dec. 31, Citizens had 936,182 policies. Of those, more than 147,000 were in Miami-Dade and about 99,700 were in Broward.

The governor did not cite rate changes in any other Florida county but said 20% of Citizens customers statewide, including in Palm Beach County, would see decreases.

DeSantis’ announcement, at a news conference at Florida International University, came even though the Florida Office of Insurance Regulation has not posted final approval of rate requests Citizens submitted last June.

Those requests called for a 14% average statewide average rate hike for the company’s personal lines business, consisting of single-family homes, private condominium units, mobile homes and rentals. The rate includes multiperil policies with wind coverage and wind-only coverage for those categories.

Citizens officials may have been taken by surprise by the governor’s announcement. Asked by text about the announcement while the news conference was ongoing, Citizens spokesman Michael Peltier said only, “We are listening now.” After it ended, Peltier said by email, “We are still awaiting the (Office of Insurance Regulation’s) orders.”

Last summer, Citizens’ board of governors recommended the 14% statewide increase because it was the highest allowable under a “glide path” established under state law.

The board justified the highest increase based on another state law requiring the company to set rates that are “non-competitive” with private insurers. Citizens’ rates in South Florida are seen as artificially lower than private market insurers’ rates, and Citizens officials explained at the time that they applied a new analysis to determine that Citizens’ rates would be non-competitive when its rates were higher than seven of 10 private market companies.

To achieve the non-competitive status as spelled out by the analysis, rates would have to climb even higher — by 74.1% in Broward County, 80.5% in Palm Beach County, and 82.6% in Palm Beach County.

In Broward, Miami-Dade and Palm Beach counties, the 14% proposed rate hike for multiperil single-family home policies was significantly higher than if the board had relied on what’s called the “actuarial” indicated rate — defined in insurance terms as what the company needs to cover expected losses.

If Citizens’ board had relied on the actuarial rate, it would have recommended rate hikes of just 0.8% in Broward, -4.0% in Miami-Dade and 9.8% in Palm Beach. The decline was attributed to a decline in litigation in the three counties following legislative reforms in 2022 and 2023.

After the rate proposals were sent to the Office of Insurance Regulation, Citizens CEO Tim Cerio met with the editorial boards of the South Florida Sun Sentinel and Orlando Sentinel and defended the decision to seek rate hikes that would eventually make Citizens’ rates non-competitive.

Neither DeSantis nor Michael Yaworsky, the state’s insurance commissioner who appeared at the news conference with DeSantis, detailed the reasons for the turnabout on rates in Broward and Miami-Dade.

Responding to a reporter who asked, “What did you and the commissioner see in (last summer’s) rate request that didn’t look right or didn’t seem right to you?” DeSantis suggested that Citizens’ Board of Governors took a second look at the request.

“Well, I mean ultimately they, they’re governed there’s a board,” DeSantis said. “I do appoint the board, but they they make these judgments based on the facts in front of them. I think what’s happened is I just think the market conditions have improved. Our view is that especially in southeast Florida, that given that you really haven’t had many storms here, that it does — it’s, it’s not, it’s not just good because we want people to pay less. Obviously we do, but it’s justifiable to say that those rates should go down. And so I’m glad they’ve evaluated it this way. I’m glad they’re able to announce.”

According to state law, the final decision about Citizens’ rates are made by the Office of Insurance Regulation, and it’s not unusual for the office to approve lower rate requests than Citizens requests. But if the rate decreases cited by DeSantis are correct, that would represent a major rejection of a policy course set by Cerio and Citizens’ board.

DeSantis also touted what he said were positive results stemming from the 2022 and 2023 reforms and cited an S&P Global report released last week that said Florida homeowner insurance rates increased by the lowest percentage — 1% — of all 50 states in 2024. Texas had the second-lowest increase, 3.4%, followed by Nevada at 4.3%.

However, a statement accompanying that report’s analysis said it was based only on rates of the 10 largest insurers in each state and excluded rates of state-run insurers of last resort, like Citizens.

A Sun Sentinel analysis of homeowners’ actual insurance costs, based on data reported by the Office of Insurance Regulation, found that average premiums for multiperil residential homes increased by 1.3% during each of the first two quarters of 2024 and by 3.1% during the third quarter. Those costs have increased by 31.1% since June 2022, after the Legislature convened in a special session to approve a package of reforms that eliminated so-called “one way attorney fees” that insurers contended were bankrupting the industry.

Yaworsky, who spoke after DeSantis, called the announced rate reduction “the latest sign in a long list of signs of market stability that is emerging throughout our state.” Yaworksy said that in 2024, he approved insurers’ requests to freeze or reduce rates more than 70 times.

Consumers should see the results of those requests when their policies renew this year, Yaworsky said.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at [email protected].