Florida's state-backed Citizens property insurance is seeking 13.5% rate hikes
That would translate to the average price of homeowners multi-peril policies going from
Other types of policies would see varying increases, but all averages would be in double digits. For example, condominium-unit owners would see an average 14.2 percent increase for multi-peril coverage. The hikes would take effect in 2025.
The hearing put on display longstanding tensions surrounding Citizens' rates, as many homeowners struggle to find affordable coverage — or any coverage — in the private market. Meanwhile, Citizens says it typically charges lower rates than private carriers, which effectively creates a disincentive for property owners to turn to the private market.
"We certainly don't take our request for a rate increase lightly," Citizens President and CEO
But state leaders and Citizens officials want to shrink Citizens, at least in part to reduce financial risks if
"The market is recovering, and that is really good news," Cerio told reporters. "But Citizens' rates are actuarially unsound, and we are competing with the private market. The market's rates are up here, and we are down here. It's basically a form of subsidized insurance."
The proposed increases, however, drew opposition from leaders of the group Fair Insurance Rates in
"FIRM is totally opposed to this or any other rate increase for
State law limits annual increases for Citizens' customers. For 2025, the law would allow a maximum 14 percent increase for owner-occupied primary residences, while increases could be as high as 50 percent for second homes.
But part of the discussion Thursday also centered on another law that says Citizens' rates should be actuarially sound and not competitive with rates charged by private insurers. In some areas of the state, that has led to Citizens seeking maximum increases to address the competitiveness issue, rather than for actuarial reasons.
"So in a lot of the filings, in a lot of areas, the capping really takes over,"
It likely will be weeks before regulators decide whether to approve the increases or require Citizens to make changes.
Citizens officials say moving policies into the private market could help avoid "assessments" that would occur if Citizens did not have enough money to pay claims after a major hurricane or multiple hurricanes. Such assessments could lead to policyholders throughout the state — potentially even non-Citizens customers — getting hit with additional charges to cover claims.
The number of Citizens policies soared in recent years as private insurers dropped customers and raised rates because of financial problems.
Citizens reached as many as 1.412 million policies in fall 2023 before seeing reductions because of what is known as a "depopulation" program designed to shift policies into the private market. Cerio said Citizens could be under 1 million policies by the end of this year.
— News Service Assignment Manager
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