Citizens' board OKs rate hikes for 2014 property, sinkhole coverage
Article Courtesy of The Orlando Sentinel
June 29, 2013
Insurance rates at Citizens Property Insurance Corp., the state-run insurer of last resort, are headed higher.
Citizens' board, meeting Wednesday in Miami, voted to boost overall rates by 7.5 percent next year.
Overall personal-insurance rates will jump 6.6 percent, with homeowners seeing an average 6.2 percent rate hike and condominium owners facing an 8 percent increase in 2014. Commercial rates are to go up 9.1 percent.
Sinkhole coverage — which is optional and not covered by a state-imposed 10 percent annual cap on increases — is slated to rise much higher than other types of coverage. In Gulf Coast counties such as Hernando and Pasco, rates will rise 20 percent under the board's action Monday. Policyholders in Hillsborough County, which includes Tampa, will see sinkhole rates jump 50 percent.
According to Citizens, in Pasco County premiums for sinkhole coverage alone cost homeowners about $1,800 a year. Yet that's still far below "actuarially sound'' rates — the levels that risk evaluators estimate the rates should be to cover potential losses.
Citizens, currently the state's largest property insurer, is aggressively pursuing plans to jettison hundreds of thousands of policies in a bid to reduce its risk and return to its original mandate as Florida's insurer of last resort.
Under a state law passed this year, Citizens will be barred from insuring homes worth more than $1 million beginning next year — leaving most Miami-Dade waterfront properties and those in upscale neighborhoods near the coast struggling for alternatives. And that cap that will be lowered further, by $100,000 a year, so that the maximum value is reduced to $700,000 by 2017.