Citizens board may delay rate hike
Article Courtesy of The JAX 4 News
June 21, 2018
TALLAHASSEE, Fla. - Citizens Property Insurance is
poised to delay a 7.9 percent rate increase for policyholders, after
some board members suggested Tuesday another rate hike may be too soon
following a May 1 increase.
The Citizens Board of Governors, which oversees the government-backed
insurer that has some 443,000 policies in the state, will discuss the
proposal at its Wednesday meeting in Maitland.
Bette Brown, a consumer representative on the board, asked the Citizens
Actuarial and Underwriting Committee on Tuesday to delay action on the
annual rate request. She said much of the state, particularly South
Florida and the Keys, is still dealing with the aftermath of Hurricane
Irma, which hit the state last September.
“Florida is still in an ongoing emergency, really, recovering,” said
Brown, who lives in Monroe County, one of the state's most heavily
The actuarial committee unanimously adopted Brown’s recommendation,
saying the question of the next rate increase will be considered by the
John Wortman, chairman of the actuarial committee, said one possibility
would be to delay the 2019 rate increase to next May 1, since a 6.6
percent increase for homeowners with Citizens multi-peril policies took
effect last month.
The 2018 rate increase, which normally would have taken effect in
February, was delayed until May, following a 90-day rate freeze imposed
Under the 2019 rate proposal that will be considered by the board,
personal-lines policies for Citizens customers will increase by a
statewide average of 7.9 percent, while commercial lines will increase
by 8.9 percent.
Personal policyholders include homeowners, condominium-unit owners,
renters and mobile-home owners. Commercial lines include condominium
associations as well as non-residential property.
Under the rate proposal, inland homeowners with multi-peril policies
will face an average increase of 8.3 percent, while coastal homeowners
would have a 9.5 percent increase. Wind-only personal-lines policies
would increase statewide by 7.8 percent.
Rate increases will vary by county, although the highest increases will
be in populous South Florida. Average rates for homeowner multi-peril
policies in Miami-Dade County will increase 9.8 percent, with an average
annual premium of $3,945. In Broward, rates will increase 9.9 percent on
average, with a $3,294 premium.
Wind-only homeowner policies in Monroe County would increase by an
average 7.8 percent, with a $3,737 premium.
Pinellas County, which has the third highest total of Citizens
multi-peril homeowner policies, would see a 2.8 percent average
increase, with a $1,705 premium, according to the proposal.
Rates would decline in a few counties, including Okaloosa, where
multi-peril homeowner policies would decrease by an average of 5.5
percent, with a $1,811 premium. But there are only 118 Citizens
homeowner policies in that Panhandle community, compared to 54,431 in
A factor in the rate increase is the continuing controversy over the
“assignment of benefits” practice where property owners with claims
assign their insurance benefits to contractors and other firms, which
seek reimbursement from the insurance companies. Citizens officials say
it leads to increased fraud and inflated claims, while defenders of the
practice say it allows property owners to be adequately compensated.
The new rate proposal notes that assignment of benefit claims “are on
the rise, particularly in South Florida, and are one of the major
factors driving increased non-weather water losses and Citizens’
increased rate need.”
Any rate increase approved by the Citizens Board of Governors is subject
to review by the Florida Office of Insurance Regulation. Last year, the
board approved a 6.7 percent increase for homeowners’ multi-peril
policies but the rate was reduced to 6.6 percent by state insurance
Citizens annual rate increases are capped at 10 percent under a “glide
path” provision in the state law.