Florida homeowners with Citizens Property Insurance Corporation policies will be shocked this spring when their renewal notices arrive and they discover that the cost of premiums have risen dramatically, some by as much as 117 percent for windstorm premiums due to an increase approved last spring by the Office of Insurance Regulation (OIR).
Citizens, the state-run insurer or last resort has had policy increases capped for four years, rising an average statewide of 10 percent in 2002 and 20 percent in 2003. At the end of December, however, Citizens requested an increase of 23 percent for general homeowners’ policies, and it will submit another request as soon as it has analyzed its potential for loss in areas in which it writes policies.
Citizens has to make sure its rates are higher than the top 20 insurance companies writing policies in Florida, and 13 companies requested 11 to 60 percent rate increases last week.
OIR regulators will review the requests this month and will either approve them or request revisions. New rate increases will be reflected in all new business on Feb. 1, while renewals will see the rate adjustment starting April 1.
Valerie Beynon, an OIR spokesperson said 12 requests to raise rates have been received from private insurance companies. “They have been trickling in since October,” she said. “We are seeing increase requests averaging anywhere from 5 percent to 24.8 percent in the aggregate.”
Companies requesting rate increases are: American Strategic Insurance Corp., Atlantic Mutual Insurance Co., Citizens Property Insurance Corp., Cooperativa De Seguros Multiples De Puerto Rico Inc., Cotton States Mutual Insurance Co., Cypress Property and Casualty Insurance Co., Florida Select Insurance Co., Metropolitan Insurance Co., Safeway Property Insurance Co., Southern Family Insurance Co., State Farm Florida Insurance Co., Teachers Insurance Co., and United Fire Group.
“We have to keep our rates higher than the other insurance companies, so we had to file new rates due to some reports that Citizen’s would be competitive with the private market,” Justin Glover, a spokesman for Tallahassee-based Citizens said. “Any time the other private insurers raise rates, under Florida law we also have to file for a rate adjustment.”
Citizens has applied for rate increases for homeowners in high-risk areas and others who cannot find coverage in the open, private insurance market. The following counties have been singled out for increases: Indian River County, 40.4 percent; Martin County, 15.6 percent; St. Lucie County, 19.9 percent. The rates affect “peril” policyholders, with residential properties insured against wind, fire, liability and theft.
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