Florida property insurance premiums will likely spike again: Citizens CEO

Citizens CEO Barry Gilway told 8 On Your Side Investigator Mahsa Saeidi it's likely premiums will spike by 20 to 30% next year, statewide. And not just for Citizens, the state insurer of last resort, but for everybody.

So what's behind the dreaded increases and can anything be done to stop it?

According to data from the Florida Office of Insurance Regulation, more than 550,000 claims have been filed in the wake of Hurricane Ian. That number is expected to rise.

Mr. Gilway has been on the ground in the hardest-hit areas, surveying the damage.

"My heart goes out to these people, it really does," said Gilway. "The number one objective is to get money into the hands of the customer."

Already, Citizens has distributed millions. Mr. Gilway estimates, in the end, Ian will cost Citizens up to $2.6 billion.

As a state entity, if Citizens can't pay the claims, they can levy a surcharge or an assessment. Essentially, that's a tax on all Florida policyholders - everybody.

"We're very, very well funded for this storm," said Mr. Gilway.

There'll be no assessment or statewide hurricane tax for Hurricane Ian. But what about the next storm or the next season? Is Citizens in good shape?

Gov. Ron DeSantis' comments on that topic in Cape Coral last week made headlines.

"We had questions early on, even as the storm was hitting, about the Citizens Property Insurance, which I think most of you know is unfortunately undercapitalized," said Gov. DeSantis.

"The governor's statement is absolutely correct," said Mr. Gilway. "We're undercapitalized, I mean, there's no question about it. The Personal Lines Account, this storm will eliminate all the surplus that we have."

By law, essentially, Citizens is broken up into three parts or accounts. Only one part, the Personal Lines Account, is currently underfunded.

That's because Citizens has more than doubled in recent years.

Two and a half years ago, Citizens had approximately 400,000 policies. They now have surpassed 1 million policies.

8 On Your Side Investigator Mahsa Saeidi asked Mr. Gilway about the most pressing concern for homeowners: the cost of insurance.

Mr. Gilway says all homeowners should expect their premiums to spike by 20 to 30% next year, unless there's significant reform.

The reason? The soaring cost of reinsurance, insurance for insurance companies.

So should we expect to see a 20 to 30% increase every year moving forward?

"If we don't fix the problem," said Mr. Gilway. "The bottom line is: It's ridiculous levels of litigation in the state - absurd levels."

Mr. Gilways says positive changes came after the governor called a special legislative session in May. But he believes the one-way attorney's fees statute and Assignment of Benefits (AOB) must be eliminated, not just reformed.