Florida’s Office of Insurance Regulation held a hearing Thursday afternoon to determine whether rate hikes approved by Citizens Property Insurance can go forward.
Earlier this year, Citizens’ board voted to increase rates to a statewide average of 14%. On top of that, the company is looking to drop thousands of policies.
In the hearing, Citizens CEO and panel said their policy count doubled in the last two years.
Citizens Insurance was never meant to be held long-term and is supposed to be considered a last resort because it covers much less than private insurers. However, hundreds of thousands of people turned to Citizens after the state’s property insurance rates spiked and other carriers left the state.
[TRENDING: Become a News 6 Insider]
Citizens offers a discount of more than 40% compared to private market companies, but the company’s CEO said because of the amount of people holding policies with them now, to remain solvent the rate increases would be necessary.
CEO Tim Cerio said they should not be competing with private market insurance companies and said if they don’t go back to their previous position in the market, it could affect all taxpayers in the state to pick up the difference.
“Why should we focus on returning to our role as the insurer of last resort? It’s because the larger we grow, the greater our exposure and the greater our exposure the greater potential financial burden on the taxpayers of Florida, people who aren’t even Citizen’s customers,” he said.
Citizens requested that recommended rates for 2023 increase statewide by 13.1% for homeowners, condominium units, dwellings and renters.
According to Citizens, the recommendations consider recent legislative actions, such as provisions that eliminate “one-way” attorney fees and allow increases of up to 50% for “nonprimary residences.”
“Today’s rate request reflects the need for Citizens to continue efforts to charge adequate rates while taking into account recent legislative reforms that have already reduced projected costs by $900 million and will stabilize the market over time,” Cerio said.
If rates are approved, they will go into effect beginning Nov. 1.
Get today’s headlines in minutes with Your Florida Daily: