The company is having another look at the way it offers this coverage, though higher rates are likely.
The state backed insurer, Citizens Property Insurance Corp., has stated that in response to the calls that have been made to match the premiums to the risk, it will be reexamining its Florida wind mitigation, which was first established ten years ago.
This will mean that many customers will see an increase in the rates they pay.
The company intends to look into the residential policies of 209,000 people before the end of 2012, to see if the credits for wind mitigation that have been credited to them are actually justified.
The incentives include efforts such as shutters, tie downs and other upgrades.
They were offered in an effort to lower the risk in the pool that are backed by the state, and started in 2002. The pool now includes almost 1.5 million policies.
Starting on April 30, which was the final date from which detailed data is available, inspectors from Citizens had finished residential inspections numbering 180,503, and have discovered that in some circumstances, there weren’t any risk prevention efforts against hurricane damage. The result is that there could be increases in premiums totaling $107 million.
That said, the inspections and the program will also see decreases in premiums for 7.5 percent of the policies, leading to a total of $4.4 million in savings for those homeowners.
Among those whose rates are on the rise, the premiums will have increased an average of $600 per year, which equates to 23 percent.
There is a growing amount of discontent among Office of Insurance Regulation officials and industry groups, about the program, as they claim that it has eroded the premium base of the insurer, though it has not made a meaningful reduction to its exposure, particularly following a notable increase in the credits in 2007.
Private insurers have also been giving Florida wind mitigation credits. According to data from a Department of Financial Services study, performed in 2010, though the programs may have good intentions, they came at a cost of lost premiums.
