Citizens Property Board to Consider Rate Hikes When it Meets Next Week

Back-to-back insurance rate increases averaging 20 percent for non-hurricane premiums and 32 percent for wind-only premiums could be requested by Citizens Property Insurance Corp.’s board of directors after it meets next week. The increases could lead to sharp increases in some homeowners insurance bills.

Should the state-backed company’s Board of Governors agree at a meeting next week, Citizens will first request from the state Office of Insurance Regulation a rate increase based on the highest prices charged by the 20 largest insurers in a region, Bob Ricker, Citizens executive director told the Fort Lauderdale Sun-Sentinel.

Then in December, the board will vote on whether Citizens can come in for another, higher increase based on an analysis of the company’s homeowner insurance premiums, Ricker said. That study showed how high the insurer’s premiums should be considered actuarially sound, or sufficient to cover the risk.

The company’s board must approve both rate increase requests before the company can submit them to the Office of Insurance Regulation.

Citizens is the second-largest home insurer in Florida and the largest in South Florida. The company covers the wind portion of insurance policies for homeowners and renters who live east of Interstate 95, and also provides insurance to homeowners who can’t get a policy from a private company.

With a number of other carriers already approved for rate increases, Ricker said Citizens had to adjust its premiums anyway because state statutes mandate that the company’s rates can’t be competitive with what private companies charge. But Ricker said it would probably take some time for the state Office of Insurance Regulation to review and act on any premium increases based on Citizens’ actuarial study.

“Our greatest concern is the actuarial analysis. Those numbers will be substantially higher” than the top 20 insurers analysis would be, Ricker told the Sun-Sentinel. “We’re anticipating a lot of questions and a lot of comments.”

The Legislature required Citizens for the first time this year to do an actuarial analysis of its premiums.

What Citizens charges for coverage and the financial impact of Hurricane Wilma were also scheduled for discussion Wednesday in Tallahassee by members of the Senate Banking and Insurance Committee.

Ricker said the statewide average increase based on the top 20 insurers’ analysis would be 15.4 percent for non-hurricane premiums and 16.2 percent for wind-only premiums.

Under the proposal that the board will vote on next week, non-hurricane premiums could rise as much as 22.2 percent and wind-only premiums could increase as much as 32.2 percent in Broward County. In Palm Beach County, non-hurricane premiums could increase as much as 14.3 percent while wind-only premiums could increase as much as 21.6 percent, said Citizens spokesman Justin Glover.

That’s a major difference from what the actuarial study showed Citizens needed to charge in South Florida. An analysis of Citizens’ rates released last month showed that wind-only premiums would have to increase as much as 106.5 percent in Palm Beach County, 129.5 percent in Broward County and 135.5 percent in Miami-Dade County to be considered actuarially sound.

A separate actuarial analysis of Citizens’ non-hurricane premiums released in September showed that the company would have to raise rates up to 32.5 percent in Palm Beach County, 50 percent in Broward and 68 percent in Miami-Dade to be considered actuarially sound.

Citizens’ board was expected this month to act on both rate recommendations based on the actuarial studies.

Topics Florida Legislation Pricing Trends Property Hurricane Homeowners