Water Damage Claims Drive Rate Increases
Citizens Property Insurance Corporation recently received approval of its 2016 rates, which will go into effect February 1, 2016. The rates as approved by the Florida Office of Insurance Regulation are similar in the aggregate to those filed by Citizens, although the OIR made some adjustments in approving the final rates. The statewide average rate change for residential multiperil policies is 1.8 percent. The average rate increase for residential wind-only policies is 8.3 percent. These rate changes are relatively modest. However, the impact of water damage claims, particularly in South Florida, is alarming and is causing many Floridians to pay more for insurance than they otherwise should have to. Far more policyholders would have seen rate decreases if the water damage claims issue were not so prevalent. Citizens’ Chief Executive Officer Barry Gilway mentioned at a public hearing on Citizens’ rates that Citizens has seen a disturbing rise in water damage claims, particularly in South Florida. Of course the issue is not limited to just Citizens. If policymakers do not act to address this issue, many hardworking Floridians will continue to pay too much for insurance to offset the losses generated by a minority of policyholders who are filing questionable and inflated water damage claims.