Citizens Property prepares for higher premiums in Florida
By Julie Patel | (Fort Lauderdale) Sun Sentinel
June 3, 2009
Citizens Property Insurance Corp., the state-backed property insurer, says it needs to boost rates for homes, condos and businesses by a statewide average of 6 percent a year starting next year, until premiums are about 44 percent higher than they are now.
Rates for most coastal customers are likely to rise as much as 10 percent a year for as many as five years, beginning Jan. 1. Rates for some inland customers could decrease slightly.
The company said it will file a final rate request with the state Office of Insurance Regulation after Citizens’ board members approve one later this month. The Florida Legislature — which had frozen Citizens’ premiums the past few years to help drive down residents’ insurance costs after the 2004 and 2005 hurricanes — passed a bill earlier this year requiring annual premium increases of as much as 10 percent. Gov. Charlie Crist signed the bill into law last week.
State officials say the rate hikes are needed to pay projected claims should a major hurricane strike Florida. All automobile- and property-insurance policyholders in Florida are subject to added fees should Citizens run out of money after such a storm.
More than half of Citizens’ 1million policyholders live in South Florida, while many others live in coastal areas in counties such as Brevard and Volusia.
Some homeowners are questioning the timing of the proposed increases, coming during a recession and after three relatively quiet hurricane seasons.
"We are losing jobs … and our government is raising our insurance rates, which will no doubt increase the number of foreclosures," said Jeff Kahn, a South Florida Realtor and homeowner. "We haven’t had a storm for a while that affected us down here … so what justifies these abominable rates?"
Citizens’ rate estimates are broken out by region and policy type; individual policyholders’ new premiums will vary based on factors such as the age, location and strength of the insured house.
Over time, the rate increases will be greater on average for policyholders in single-family homes than those in condos. Rates could decrease slightly for customers living inland.
This year’s legislation also allows private insurers to increase customers’ premiums by as much as 10 percent a year, pending state reviews.
Julie Patel can be reached at 954-356-4667 or firstname.lastname@example.org.