Florida regulators approve rate increase proposal from Citizens Property Insurance
Florida Businesses and homeowners can expect to see their insurance premiums jump by at least a double-digit sum early next year. Florida’s Citizens Property Insurance has been granted approval for a rate increase that will take effect January 1, 2013. The insurer’s rate proposal was approved by the Florida Office of Insurance Regulation this week. Though there are roughly three months before the new rates take effect, policyholders are up in arms over the approval of the rate hike.
Homeowners insurance policies expected to become more costly
Citizens Property Insurance will raise rates on multi-peril homeowner’s insurance policies by an average of 10.8%. Policies regarding dwelling fires will jump by 8.8% on average. Homeowner’s with sinkhole policies will see a significant rate increase of 21.4%. Homeowners with insurance policies regarding wind damage will also see a jump in rates, but these will not take effect until February 1, 2013. According to Insurance Commissioner Kevin McCarty, the approval of the rate increase for these policies is meant to give consumers and opportunity to return to the private insurance market.
Citizens continues depopulation campaign
Citizens Property Insurance has been working to depopulate for several months, backed by pressure from state lawmakers. The state-run insurer is facing serious financial problems that are linked to the large number of policyholders it provides service to. The insurer is consider one of the best places to find affordable coverage in the state, especially as most private insurance companies have either fled Florida because of the risk involved with natural disasters or charge excessively for coverage.
High-risk policies expected to remain with Citizens
Whether this new initiative will succeed in driving consumers away from the insurer has yet to be seen. Even with rate hikes, Citizens Property Insurance is still one of the best places in the state to find affordable coverage. This is especially true for those residing in areas that are prone to natural disasters. These consumers are unlikely to find affordable coverage through private insurers, thus are expected to remain with Citizens Property Insurance.