The Board of Governors for Florida’s Citizens Property Insurance Corp. approved on Wednesday a 2015 rate package that reflects an overall average 2.9 percent statewide decrease for personal residential policyholders across the state.
Citizens said single family homeowners will see an average drop of 3.2 percent for the coming year under a slate of rate recommendations that must be approved later by the state’s Office of Insurance Regulation. Overall, personal and commercial rates will decrease by 1 percent.
Citizens said sinkhole rates in Pasco, Hillsborough and Pinellas Counties will remain the same for 2015. Sinkhole policyholders in Hernando County, which continues to have the highest loss ratio in the state, will see a 10 percent increase.
Citizens, Florida’s largest property insurer with over 928,000 policyholders, has raised its rates for four consecutive years.
But following eight hurricane seasons with no major storms, five years of rate adjustments under the glide path and historically low reinsurance costs, Citizens said nearly seven in 10 Citizens personal lines policyholders will see rate reductions in 2015, with 58 percent of customers receiving reductions of more than 5 percent.
Chris Gardner, chairman of Citizens’ Board of Governors, said the 2015 rates reflect Citizens’ best actuarial estimate of its rate needs for the coming year. “Following five years of prudent rate filings under the glide path, actuarial estimates now indicate rate reductions are in order for a significant number of our policyholders,” Gardner said.
The statewide average homeowners multiperil premium proposed for 2015 is $2,379, down from an average of $2,538 in 2014.
The recommended 2015 rates will be submitted to the state’s Office of Insurance Regulation, which must approve Citizens’ rates before they take effect. Rate increases of non-sinkhole coverage are capped at 10 percent by statute. The cap does not include statutorily required payments to build up cash reserves in the Florida Hurricane Catastrophe Fund.
Citizens President and CEO Barry Gilway said the rates approved by the board indicate that Citizens is moving in the right direction. “They also are a clear sign that Citizens and all Florida property owners will see clear benefits from improving financial stability in the private insurance market,” said Gilway.
Source: Citizens Property Insurance Corp.
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