Citizens Completes Analysis: Board to Consider Increases in Three South Florida Counties
An analysis rate structure analysis of Citizens Property Insurance Corp. was just completed after an order by the Office of Insurance Regulation, indicates that Palm Beach, Broward and Dade county policyholders could soon face major rate increases, with premiums more than doubling in some coastal communities.
Citizens released the analysis Thursday. The company’s Board of Governors will review the report at a meeting in November and will decide whether to submit a request for higher premiums based on the findings, Justin Glover, Citizens spokesman told the Fort Lauderdale News and Sun-Sentinel.
“We’re going to let the board have that discussion,” Glover said. “I don’t know what the board will determine.”
Citizens is required by state law to charge the highest premiums in Florida. But Glover said regulators asked Citizens to do an actuarial analysis of its rates, rather than base them on private insurers’ premiums, because “Citizens’ risk is not necessarily the same as private companies” that won’t cover coastal homes.
The board will receive additional information, such as the dollar amount that policyholders would see their premiums increase, “to let them look at the whole impact” should Citizens seek approval for higher rates from the Office of Insurance Regulation, Glover said.
Citizens also will be subject to a required public hearing on its rate increase.
While Citizens has a responsibility to ensure they can pay claims from future catastrophes, “We are sensitive to the concerns of our policyholders who are struggling to afford the rising cost of insurance,” Bob Ricker, Citizens executive director said in a written statement. “We look forward to working with the Legislature and state policymakers as Citizens determines our appropriate rates.”
The analysis shows that the wind portion of premiums in Palm Beach County would have to increase from 76.5 percent to 106.5 percent for the company to charge actuarially sound rates.
That means if a Palm Beach policyholder pays $1,500 toward the wind portion of a policy, and lives in an area where rates are recommended to rise by 106.5 percent, the policyholder could pay an additional $1,597.50, a total of $3,097.50 a year, toward hurricane coverage.
The proposed increase is as high as 129.5 percent in Broward County and as high as 135.5 percent in Miami-Dade County.
These latest suggested increases apply only to the hurricane portion of the premium, typically the largest part of a homeowner policy in Florida.
Citizens also has another proposed increase of up to 32.5 percent in Palm Beach County for the fire and theft portions of homeowner policies.
This proposed increase applies only to policyholders whose hurricane coverage comes from Citizens, the insurer of last resort in Florida and the largest insurer in South Florida.
The company covers the wind portion of insurance policies for all homeowners and renters who live east of Interstate 95, and also provides insurance to homeowners who can’t get a policy from a private company.
These latest 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 to make up for losses from last year’s four hurricanes that hit Florida.
Every Floridian with a home insurance policy pays that assessment, regardless of whether Citizens insures them.
Someone with a $2,000 annual premium will pay an additional $136 to compensate Citizens for losses it incurred after the 2004 hurricane season.