Florida’s Citizens Seeks Rate Hike, Sinkhole Increase Cap

Florida’s state-backed property insurer requested a statewide average 6.6 percent increase in homeowners’ rates along with a cap on sinkhole rate increases in three high-risk counties at between 20 percent and 50 percent.

Citizens Property Insurance Corp. officials signed-off on its annual rate filing. If approved by regulators, it will apply as of January 2014 and raise $174 million in premiums next year.

The filing calls for a statewide average increase in all lines of seven percent that includes a 6.6 percent increase in homeowners rates and an average 9.1 percent increase in commercial prices. If approved as filed, the average homeowners rate in 2014 would be about $2,112 for non-sinkhole coverage.

“The rates approved by the board indicates that Citizens is moving in the right direction,” said Citizens President Barry Gilway. “The board continues to make the tough but necessary decisions while recognizing the impact on Citizens policyholders.”

By law, the insurer’s rate increases are subject to the so-called glidepath, which caps average increases at 10 percent, plus a separate percentage that is earmarked to build up the reserves of the Florida Hurricane Catastrophe Fund.

The only exception to the 10 percent cap is sinkhole rates. Based on a 2011 law, rates for the optional coverage are required to be actuarially sound.