|Date:||September 16, 2016|
State regulators approved premium increases averaging 6.4 percent on homeowner policies issued by Citizens Property Insurance Corp., Florida’s state-run insurer of last resort.
The Office of Insurance Regulation pared down that increase slightly from the 6.9 percent Citizens sought during a rate hearing last month.
You can read the order here.
The office approved rate increases of 8.2 percent for wind-damage coverage for homes on the coast — Citizens’ full ask. Actual rates would vary depending on location and policy details.
Mobile home owners’ rates will increase an average 5.7 percent. Wind-only coverage for these dwellings will increase by 10.3 percent, which Citizens said “remains well below market rates.”
Notwithstanding the average increases, Citizens said 100,000 policyholders would pay less in premiums when the new rates take effect on Feb. 1.
“The 2017 rates reflect the growing challenge of rising water loss claims and the disturbing increased costs associated with assignment of benefits,” Barry Gilway, Citizens’ president, chief executive officer, and executive director, said in a written statement. “Unless the Legislature takes action, our policyholders can expect these increases for years to come.”
Citizens — along with other insurers and business interests — had blamed much of the increase on a spike in non-storm-related water damage, from burst pipes and the like. Compounding the problem were assigned benefit agreements, they said, whereby policyholders cede claims to contractors and lawyers in exchange for quick repairs.
These AOBs, critics said, are rife for fraud.
“Educational awareness efforts directed at policyholders and policy language changes approved by the office are proactive measures by Citizens to help curb this trend going forward,” the office said in a written statement.
For Monroe County, where residents complain even Citizens’ insurance is becoming unaffordable, the office said it would ask the Florida Commission on Hurricane Loss Projection Methodology to examine models used to predict the risk.
“This review is in addition to a separate initiative underway to evaluate building code standards in Monroe County and their effect on rates,” the office said.
“The office will require an additional rate filing by Citizens for its policyholders in Monroe County if the results of either or both of these efforts support such a filing,” it said.
Citizens’ “depopulation” program has shed nearly 1 million policyholders since 2012, but it said itremains amongFlorida’s largest property insurers, with 492,775 personal and commercial policies in force as of Sept. 9, 2016.