In the wake of one of the largest insurance rate increases to hit the state, Florida’s Citizens Property Insurance has been the subject of criticism from the public and state regulators. The state-run insurance company recently received approval to hike up the premiums for sinkhole coverage by an average of 429%. These rates have yet to take effect, a fact that Insurance Commissioner Kevin McCarty has been keen to express. The Commissioner has vowed to ensure that the steep rate hike is to be phased in slowly, hoping to ease the financial impact of the new rates.
Citizens has justified the new rates as a means to battle the rising levels of insurance fraud focused around sinkholes. McCarty, in speaking with the Citizens Property Insurance board last week, claims that the insurer has overlooked a significant piece of legislation that offers protection to insurers by mitigating the effects of fraud. The Commissioner asserts that future rates cannot be based on the prevalence of fraud when there are laws that exist solely to battle it.
Despite McCarty’s impassioned opposition to Citizens massive rate hikes, the Commissioner has told homeowners that higher insurance rates cannot be avoided. The Commissioner has told the Governor that his office will remain vigilant of the insurer, keeping an eye on how much money the company is saving from the anti-fraud legislation. Overall, McCarty is concerned with balance, which is dedicated to finding.