Florida’s state-backed and largest property insurer will be allowed to raise its rates for homeowners an average 5.4 percent in 2010.
The increase is the first one allowed since lawmakers froze the rates of Citizens Property Insurance Corp. three years ago but it’s below the increase permitted under a new law.
Also, rates for dwelling fire policies will go up 8.8 percent and for mobile homes, 1.7 percent. Rates for condominiums will go up 10.2 percent.
The increases that were approved closely mirror what Citizens Property Insurance Corp. had proposed. Some industry and business groups had urged that rates be hiked further to move the insurer to a more actuarially sound footing and to encourage more competition from private insurers. They said the Legislature intended for there to be an across-the-board hike of 10 percent.
But state officials had argued that the law was flexible and that Citizens should raise rates gradually because homeowners could not afford big increases now.
Florida Insurance Commissioner Kevin McCarty yesterday signed the order establishing Citizens rates for most lines of business, except so-called high risk accounts. A hearing on HRA rates has been scheduled for Nov. 10.
Although the Florida Legislature capped rate increases at 10 percent, some categories do show higher increases because, McCarty said, the law allows companies to pass on some of the cost of their annual premium paid to the Florida Hurricane Catastrophe Fund to policyholders.
The following are the average rate increases McCarty approved:
- Homeowners: 5.4 percent
- Dwelling Fire: 8.8 percent
- Mobile Homeowners: 1.7 percent
Mobile Homeowners Physical Damage and Commercial Lines:
- Mobile Home Physical Damage: 2.1 percent
- Commercial Property Residential-Condo Assoc.: 10.2 percent
- Commercial Property Residential-Ex-wind-Condo Assoc.: 10.2 percent
The increases that Citizens had proposed are:
- Homeowners: 5.4%
- Dwelling Fire: 8.8%
- Mobile Homeowners: 1.8%
- Mobile Home Physical Damage: 2.1%
- Commercial Property Residential-Condo Association. 10.1%
- Commercial Property Residential-Ex-wind-Condo Association: 10.1%
After having had its rates suppressed for three years, Citizens’ own actuaries have acknowledged rates would have to go up about 40 percent on average on residences, more than 10 percent on commercial residential properties and as much as 140 percent on wind-only commercial property policies to reach proper funding for its exposure, which is about $405 billion for its 1,040,000 policies.
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