Florida’s government-backed homeowner’s insurance company plans to raise rates by 14%, another blow for more than 1 million residents of the hurricane-struck state struggling with premiums among the highest in the country.
The Citizens Property Insurance Corporation Board of Governors voted unanimously Wednesday to increase rates for next year, despite the fact that nine private insurers in the state have filed to reduce their rates. tariffs while ten others have indicated that they intend to maintain their tariffs. flat rates for 2025.
The rate hike is awaiting approval from state regulators.
“Pay because you’re paying for heaven…of course.” I agree. We have to pay a little more…but how much more? Too much. It’s too much,” Sofia Bereza, a Tampa area resident, told WFTS-TV Wednesday.
Bereza said she considered a citizen’s policy, but no matter which company offered home insurance, the prices were high.
A combination of more intense storms and hurricanes and soaring inflation have caused insurance premiums to skyrocket.
“You know, it’s unfortunate, but I also understand that inflation has caused a whole bunch of problems, and then on top of that, the climate isn’t what it used to be, so we’re hit by a lot of storms that have been unexpected,” Frances Druding, another Tampa area resident, told WFTS-TV.
In a statement to the Post, Citizens said, “The rates recommended by the board today are intended to continue the movement toward actuarially sound rates while reflecting the benefits gained from recent legislative reforms. »
The company said premiums “remain well below the rates filed and approved by most private insurance companies writing in the state.”
“The proposed 2025 rates will help reduce assessment risk for non-citizen policyholders, many of whom already pay higher premiums,” the company representative told the Post.
Owners of primary residences will have to pay 14% more, while those with second homes – defined as residences occupied nine months or less each year – will have to pay 50% more.
Although the 14% increase is substantial, Citizens’ rates are still on track to be significantly lower than those offered by other insurers.
Miami-Dade County homeowners with Citizens insurance policies covering fire, theft and windstorms would see their premiums rise from an average of $5,113 to $5,804, according to data compiled by the Miami Herald.
Broward County residents who are enrolled with Citizens would see their premiums increase from an average of $5,385 to $6,112.
In the least expensive parts of the state, like Hillsborough County that surrounds Tampa Bay, average premiums would rise from $2,667 to $3,028.
In neighboring Pinellas County, which includes Clearwater and St. Petersburg, premiums would increase by an average of $2,854 to $3,234.
Citizens, the state’s largest insurer, was created by the Florida state legislature in 2002 as a last-resort option for residents who were unable to find an insurance policy on the open market.
The current citizens council is made up of lawyers and business executives appointed by Florida’s Republican governor, Ron DeSantis, and the Republican Party-led state legislature.
By law, citizens’ insurance rates have been capped since 2007. In recent years, however, lawmakers have voted to raise the caps.
The company said Citizens’ fares have not been adequate for many years due to the fare cap, “which is why we do not reduce fares like other carriers in some cases.”
In 2022, Florida lawmakers required citizen policyholders to purchase flood insurance by March 2027.
Any Citizens policyholder who owns a home valued at $500,000 must purchase flood insurance by Jan. 1 of next year.
While Florida has experienced a population explosion in recent years thanks to its low-tax, business-friendly climate that has attracted residents from blue states like New York and California, its homeowners insurance market is volatile.
In March, an analysis by S&P Global Market Intelligence found that Florida insurance companies made money last year for the first time in seven years.
A group of about 50 insurers reported net profit of $147.3 million for 2023, compared with net losses of more than $1 billion in each of the previous two years, according to the analysis.
Although the insurer group still recorded collective underwriting losses of $190.8 million, they were much lower than in previous years, when they stood at almost $1.80 billion in 2022 and to $1.52 billion in 2021, S&P Global Market Intelligence said.
Devastating storms such as Hurricane Andrew in 1992 and subsequent weather events wiped out some insurers in the state while deterring others from doing business there.
Last year, Farmers Insurance announced it was discontinuing new coverages for auto, homeowners and umbrella policies in Florida, and AAA said it had decided not to renew “a very small percentage” of home and auto insurance policies.
Nine insurers have been declared insolvent or merged with other companies in Florida since 2021.
Average annual property insurance premiums jumped 42% last year to $6,000 in Florida, compared to the national average of $1,700.
DeSantis and the state Legislature have addressed the issue in 2021 and 2022, including holding a special session, but the main focus has been on protecting insurance companies from lawsuits and putting side of the money for reinsurance to help protect insurers.
Insurance companies are optimistic that the changes have reduced expenses, particularly costs related to claims litigation.
Additionally, Florida regulators this year approved six property-casualty insurers to begin writing residential property insurance policies, S&P Global Market Intelligence reported.
With post wires