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Insurance Consumer Advocate

Sha'Ron James

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Hearing on Citizens rate increase fails to draw crowd


By James Rosica

Tampa Tribune

What if state insurance regulators had a public hearing and nobody came?

That was almost the case Tuesday after officials rented a ballroom at the Tampa Convention Center to hear reaction to proposed rate increases by Citizens Property Insurance Corp.

They opened the coffee cart, set up hundreds of chairs and even announced they were validating parking.

By the end of the hearing, only four people came to the microphone. Mark Klutho, a Citizens policyholder and disabled veteran from Largo, was one of them.

“The way I see it, this is racketeering,” he said of the state’s insurer of last resort. “This is one big fraud.”

The Citizens board already approved a request to raise homeowners insurance rates by an average of 7 percent statewide next year, costing more than 1 million policyholders a total of an extra $178 million. The increases have to be approved by the Florida Office of Insurance Regulation this fall.

Policyholders in coastal areas, or “high risk accounts,” face a nearly 10 percent average increase.

For a $250,000 home in Hillsborough County, a policyholder faces an extra $184 per year in premiums, according to Citizens. In coastal Pinellas, the same value home is looking at another $263. And in coastal areas of Pasco County, it’s an average increase of $221.

Citizens officials said the company, a not-for-profit government corporation, is in its “best financial position ever,” with nearly $6.3 billion in reserves.

But they predict that the next major hurricane to hit the state could wreak around $17 billion in damage.

Citizens CEO Barry Gilway told regulators he tried to strike “a delicate balance” between needed rate increases and going easy on customers.

“We want to be as fair as we possibly can to the vast majority of our policyholders,” he said.

The company ultimately can’t charge as much as it wants to because of a 10 percent cap on rate increases. That cap is part of a property insurance bill passed in 2011 that promised to reduce costs for the state’s insurance market and steady its fluctuations.

Florida Insurance Consumer Advocate Robin Westcott suggested that law is working, with figures showing profits are up for many private insurers still doing business in the state.

She displayed a color-coded chart showing that most Citizens policyholders are in South Florida and the greater Tampa Bay region.

Westcott said that those who pay more for insurance need to stop complaining about others paying less: “Everybody just needs to get over it.”

That got a tart response from state Rep. Dwight Dudley, a St. Petersburg Democrat.

While increased profits are good for business, “Why can’t we have more fair treatment of consumers?” he asked. “We can’t just get over it.”

Former state Rep. Mike Fasano, the New Port Richey Republican who requested the hearing, said Citizens already raises rates “through the back door” by declining mitigation credits – discounts offered for things like wind-resistant siding or replacement windows.