A rate hike was just approved for the property coverage in Florida for the state backed insurer.
Next year, homeowners insurance customers who remain with Citizens Property Insurance Corp. in Florida will see an average increase in their rates by 6.3 percent following the approval that was just received for the change.
The Office of Insurance Regulation gave its approval of this rate, which was lower than the original request.
The initial proposal for the homeowners insurance rate hike at Citizens had been 7.9 percent. The comparatively lower increase will affect combined personal lines as well as coastal accounts. Officials from the state backed insurer had previously claimed that an increase of 7.9 percent wouldn’t be enough to cover the costs that they are expecting to face in 2014. This increase does not, however, include coverage for sinkhole damage.
This homeowners insurance rate hike has also arrived at a time that Citizens will be divesting itself of many policies.
The announcement of the new rates follows closely on the heels of another from the homeowners insurance company, in which it stated that as many as 400,000 policyholders will be informed – within the next month – that they will be required whether they would like to remain with Citizens or if they would prefer to have their coverage shifted over to a private insurer.
Barry Gilway, the CEO and President of Citizens, issued an email that expressed the homeowners insurance company’s gratitude to the Office of Insurance Regulation “for its diligence in reviewing Citizens’ 2014 rates and pleased that it has agreed with our overall approach.”
He added that “The agency’s action will allow Citizens to continue providing quality service to our 1.2 million policyholders while reducing the risk of assessments on all Floridians.” As of July 31, Citizens had 1.22 million policies and is working hard to eliminate as many of them as possible, including its effort to reduce by up to 400,000 over the next month.
The homeowners insurance rate increases will hit hardest on policyholders who have coastal properties. This situation is even greater for the wind-only coastal property coverage, where the increase that was approved was 10.5 percent, which is even higher than the requested amount, which was 9.8 percent.