Citizens Board Meets to Consider Raising Rates

Members of the Citizens Property Insurance Corp. board of governors will meet Friday in Orlando and will vote on a plan that could sharply increase homeowners policies by from 32.5 percent to 68 percent.

The proposed premium increases are in addition to double-digit increases seen by some customers in the past year, and a 6.8 percent assessment that all Floridians with a home insurance policy must pay to cover Citizens’ losses from the 2004 hurricane season.

The board of governors of Florida’s insurer of last resort will consider insurance premium increases of as much as 32.5 percent in Palm Beach County, 50 percent in Broward and 68 percent in Miami-Dade. A separate review of Citizens’ wind-only rates is also expected next month.

People who live east of Interstate 95 and have their entire homeowner policy with Citizens would have increases apply only to the fire and theft portion of their coverage, company spokesman Justin Glover told the South Florida Sun-Sentinel. Wind coverage is typically the most expensive part of an insurance premium.

Citizens insures homes that can’t get coverage on the private market. It also covers the wind portion of policies for all homes east of I-95. It must first get board approval before filing its rate revisions to the state Office of Insurance Regulation, Glover said.

For those affected by this latest proposal, the increases could be quite steep. Citizens customers in parts of Miami-Dade County could see rates rise up to 68 percent, while policyholders in Fort Lauderdale and Hollywood could see increases as high as 50 percent, according to the proposal.

Citizens customers in Palm Beach County would see up to a 32.5 percent increase in coastal areas, 14.5 percent inland, according to the proposal. The overall statewide average increase is 37.2 percent, Glover said.

These proposed increases come on top of a 6.8-percent one-time assessment that all insurance policyholders are paying to bail out a $516 million deficit in Citizens’ high-risk, or wind-only, account. Every Floridian with a home insurance policy pays that assessment, regardless of whether Citizens insures them.

That means someone with a $2,000 annual premium will pay an extra $136 to compensate Citizens for losses it incurred after the 2004 hurricane season.

The company already got approval last year to enact double-digit rate increases that took effect this year.

The proposed increase includes several plans to change how much Citizens charges to cover certain homes, Glover said. Two suggestions the board will consider: Have Citizens charge as much as 20 percent higher premiums for customers whose homes are more than 40 years old and tacking on larger increases for people whose homes are insured for more than $200,000, because many private companies also shy from insuring expensive homes.

Those percent increases would vary — as low as 0.1 percent for someone whose home is insured between $200,000 and $225,000, and as much as 16.2 percent for someone whose home is insured for more than $1 million.

This is the first time that Citizens has determined how much of a premium they should charge based on how old a home is, Glover said. Citizens insures more older homes than private carriers, because most private companies won’t cover them, he said.

Although Citizens is required by law to have higher rates than what’s charged by private companies, that doesn’t mean the rate request is guaranteed approval. “It certainly would be subject to the same review as any other filing,” Glover said.

The company will be subject to a public hearing should it submit a rate request that exceeds 15 percent, said Beth Scott, a spokeswoman for the Office of Insurance Regulation.

“[Citizens is] treated just like every other insurance company,” Scott said.