Florida’s largest insurer of homes and businesses, state-backed Citizens Property Insurance Corp., will ask its board to approve a sizable premium increase — 400 percent– for providing coverage on sinkhole policies, a company spokeswoman said this week.
The company will ask its board Wednesday for an increase on average of more than 400 percent to purchase sinkhole coverage. In 2010, Citizens received about $32 million in premiums for sinkhole coverage with ultimate losses and loss-related expenses estimated to total $245 million. In areas where sinkhole claims have been particularly high, premium increases could be multiplied 20 times or more under the proposal.
Since the last major hurricane hit Florida in 2005, sinkhole claims have skyrocketed, totaling nearly $2 billion in the last four years. Most of the claims have come from Hernando, Hillsborough and Pasco counties, part of the Tampa Bay area.
New legislation passed this spring allows Citizens to raise its rates to whatever level it believes is necessary to offset such losses. Lawmakers heard testimony that sinkhole claims have tripled in the last three years with two-thirds of those coming from that tri-county region.
Citizens’ spokeswoman Christine Ashburn said the company’s Board of Governors will discuss the request for the rate hike Wednesday when it conducts its meeting by teleconference.
Citizens is Florida’s largest insurer of homes and businesses with more than 1.4 million policyholders. It was created by the Legislature in 2002 to provide insurance to homeowners in high-risk areas and those who couldn’t find coverage in the private market.