TALLAHASSEE, Fla. – The Citizens Board of Governors on Wednesday approved a historic double-digit rate hike, set to be in place by year’s end.
Florida’s Citizens Property Insurance Corp. earlier this month revised its latest rate hike proposals by settling on an average 11.5% increase for multi-peril policies. The average becomes 12.3% when factoring in all personal lines, such as wind-only and mobile-home policies. Many commercial properties could otherwise be looking at an average hike of 10.2%.
“No one wants to pay higher insurance rates, I don’t want to do that,” said Citizens Insurance president and CEO Tim Cerio. “But we are actuarially unsound.”
This comes after Citizens was ordered in August by the state Office of Insurance Regulation to back down from seeking an average increase of 13.3% overall. The since-tossed proposal called for 12% increases among primary residences with multi-peril policies.
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“We’ve responded to OIR’s (the Office of Insurance Regulation’s) concerns and think the rates we’re presenting to our board reflect those requested changes,” Citizens spokesperson Michael Peltier said in mid-September.
Experts say Citizens is trying to return to being a true insurer of last resort. Citizens has roughly 1.4 million policies statewide, growing as other companies pulled out of Florida. They have more than any insurance company in the state.
Citizens is sending out letters to 304,000 policyholders with offers to switch to a private insurer. Customers must respond by Oct. 10, or their policies will automatically default to the private insurance company.
Commercial rate hikes will go into effect Nov. 20 and personal-line increases begin Dec. 16.
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