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Hurricane season
has barreled
through Florida
leaving its
trademark trail
of chaos. But
for some
residents, the
storms continue
to unleash a
financial
hammering.
Citizens
Property
Insurance Corp.
is bumping up
insurance rates
by a statewide
average of 44
percent for
homeowners in
high-risk areas,
including up to
a 40.5 percent
hike for some of
those
policyholders
living on the
First Coast.
That, however,
pales in
comparison to
the 127.8
percent increase
for some
residents in
Escambia County,
where Hurricane
Ivan hammered
the Pensacola
Bay area in
2004, followed
by bouts with
Dennis and
Katrina this
year.
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40.5 percent
rate increase
Citizens
Property
Insurance
Corp.'s board
approved a 44
percent
statewide
average rate
increase for
homeowners in
high-risk areas.
The rate hike
will add about
$1,028 to the
average
homeowner's
insurance cost
for a total
average of
$3,363.
Some
policyholders
living in high
risk areas on
the First Coast
will see rate
increases of up
to 40.5 percent.
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Hurricane-related
losses have many
Florida insurers
scurrying for
financial cover.
More than 20
companies such
as Cincinnati
Indemnity Co.,
Cincinnati
Insurance Co.
and Florida
Select Insurance
Co. have sought
rate increases
this year.
Several firms,
including
Nationwide
Insurance Co. of
Florida, have
given notice
they will cut
back on
coverage.
Seattle-based
Safeco has
stopped issuing
new homeowners'
policies in
Florida and said
it will not
renew existing
policies
starting in
January.
"Citizens is
supposed to be
the [insurer] of
last resort,"
said Jeff Grady,
president of the
Florida
Association of
Insurance
Agents, which
represents more
than 1,300
independent
agencies
statewide.
"Unfortunately,
they are the
[insurer] of
only resort in
Florida right
now along the
coastline."
Although
Citizens' spike
in premiums
might startle
some
policyholders,
one industry
lobbyist shrugs
off the move as
inevitable.
The rate
increase, which
must be approved
by the state
Office of
Insurance
Regulation, will
add about $1,028
to the average
homeowner's
insurance cost
for a total
average of
$3,363.
Citizens
insurance, which
covers about
800,000 people
statewide,
including more
than 10,800 in
Northeast
Florida, is
available to
those who can't
find coverage in
the private
market. It is
the
second-largest
insurer after
State Farm.
The rate
increase is
necessary to
maintain
reserves to pay
future claims,
said Mark
Goldwich, public
adjuster with
Jacksonville-based
Gold Star
Adjusters.
Citizens
"certainly [is]
not taking in
... what they
are paying out
in claims,"
Goldwich said.
The increase,
approved by
Citizen's board
Thursday, is in
addition to a
16.2 percent
increase in
high-risk
coastal areas
that was
approved last
February. Last
month, the
insurer
increased
residential
property
insurance rates
by a statewide
average of
roughly 15
percent to keep
pace with rate
inflation among
private
insurers. That
increase was
based on an
analysis of the
top 20
residential
property
insurance rates
in the state
Citizens tallied
a $516 million
deficit last
year and is
expecting a
roughly $1
billion deficit
this year. The
increases don't
factor in damage
of up to $1
billion from
Hurricane Wilma,
which may force
another round of
price increases
for Citizens,
said Justin
Glover, a
company
spokesman.
Citizens'
deficit is
"indicative that
their rates are
not adequate,"
Grady said. "I
know that pains
people who are
paying pretty
high prices
already, to
hear. But there
is just a
mountain of
losses."
When asked to
speculate on
where the
ceiling for such
rate increases
might be,
Goldwich made a
gloomy
prediction: "I'm
not sure that
there is one. As
long as we keep
getting storms,
[insurers] are
going to have to
keep raising
rates."
Worse, there is
little that
consumers can do
about it.
"There are very
few companies
willing to
write," Grady
said.
"[Therefore]
consumers are
forced to do
business with
Citizens if they
want to have
their property
insured."
The Associated
Press
contributed to
this story.
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