Earlier this year, Florida’s largest home insurance company, Citizens Property Insurance Corp., proposed the largest rate increase in the state’s history. The company sought to increase the average rates of insurance policies for homes and business by 400% throughout the state, along with a proposed 2,000% increase for certain, risk-prone counties. The proposal was opposed by several consumer advocacy groups, but that opposition proved futile as state insurance regulators approved the proposal. Since the approval, lawmakers have been struggling to find a balance between enacting the rate increase and granting some degree of leniency to consumers by enacting the rates a slow pace.
Thus far, state legislators have been unable to find an efficient plan that would not severely impact consumers on a financial level. The stalemate has led many legislators to ask the insurer to agree to rate increases much lower than their original proposals. Spurred by public opposition and legislative pressures, the state-backed insurance company agreed to make changes to their proposal.
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The leaders of Citizens met Monday to find a resolution to the situation. Citizens will limit their rate increases to 50% for 2012, with additional increases being enacted over the next several years. This will ensure that the company still gets the rates that it wants while mitigating the financial impact on consumers.
The rate increases are a result of rampant sinkhole claims being filed throughout Florida. Many of these claims are falsified in an attempt to win money from the insurer.