The board has voted and decided on a statewide average increase of 10.2 percent.
The Citizens Insurance board voted on Friday, July 27, 2012, and has decided to increase its rates across Florida by an average of 10.2 percent.
This will boost insurance costs to homeowners by $250 million.
Policyholders and consumer groups are enraged over the Citizens Insurance increases, as they are already being weighed down by the prices of higher deductibles, re-inspection costs, and reduced coverage.
This vote is the latest step in the Citizens Insurance campaign to lower the appeal of its coverage.
This effort is backed by Florida Governor Rick Scott. It works to try to make coverage through Citizens Insurance more costly to homeowners, therefore making it less attractive. The reason is that they are hoping that this will push customers into the private insurance market in the state, which is currently quite limited.
Though the board has voted and approved of the rate increase, it is still subject to the approval of the Office of Insurance Regulation. Should the rate hike be approved, it will become effective as of the beginning of 2013. South Florida will see a higher increase than other areas, as their premiums are boosted by up to 11.2 percent. This will raise the costs to many homeowners by hundreds of dollars every year.
According to the board meeting which occurred on Friday in Miami, the reason that the rates are necessary is that the risk faced by Citizens Insurance is currently too high. It also pointed out that this will make the state’s marketplace more friendly to private insurers.
The president of Citizens Insurance, Barry Gilway, explained that the insurer had been “selectively moving rates higher in a very measured way so that, over time, we can be appropriately positioned in the marketplace.” The board did, however, decide that it would not be moving forward in the controversial efforts to charge higher premiums to brand new customers, or to limit water related claims to a maximum of $15,000.
With the increase of an average of 10.2 percent, Citizens Insurance has taken into account the potential impact of a major hurricane on the state’s economy.
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