Florida Insurance Commissioner Kevin McCarty has approved a statewide average homeowners insurance rate increase of 10.3 percent for policies written by state-backed Citizens Property Insurance Corp. The actual rate increases vary by territory.
Citizens had filed for a 9.7 average increase but McCarty determined a slightly higher rate was needed to comply with state rating law.
Citizens has cited an increase in sinkhole claims as a major reason for the increases. Citizens took in $19.6 million for sinkhole coverage in 2009 but paid out $97 million in claims costs.
Rates for sinkhole coverage will rise from 10 percent to 30 percent. OIR is also requiring Citizens to inspect all homes where sinkhole coverage is requested and if the properties do not pass inspection, exclude sinkhole coverage.
McCarty approved an average increase of 9.2 percent for mobile homes. For mobile homes physical damage, the average increase will be 9.2 percent.
The effective date for personal lines account is Jan. 1, 2011; for high risk accounts, Feb. 1, 2011.
Actuarial indications are that rates should go up by more than 50 percent for Citizens to be soundly funded. However, state law caps increases to an average of 10 percent a year, plus costs to build up cash in the Florida Hurricane Catastrophe Fund, which nudged the final rate above the 10 percent cap.