Homeowners insurance rates to spike in Florida
Florida is home to some of the highest homeowners insurance rates in the U.S. Next week, those rates may reach new heights thanks to the state’s Citizens Property Insurance Corp. News of rate increases coming from the state-run insurer has been circulating for some time, but now the organization’s board of directors seems to be ready to take rate hikes into serious consideration. Executives are currently schedules to meet next week in Miami in order to discuss a range of rate hikes, all of which are likely to make homeowners insurance in Florida more expensive than it already is.
State-run insurer continues to work to solve financial problems
The state-run insurer has been faced with troubling financial struggles for several years. The organization has yet to overcome these struggles, which has caused state lawmakers to become more involved in Citizens Property Insurance. The organization is responsible for the vast majority of homeowners insurance policies in the state, but offers coverage at rates significantly lower than private companies. This has made Citizens Property Insurance popular, but somewhat unable to generate the finances it needs to be considered viable. As such, state lawmakers have been pressuring the organization to raise rates on the coverage it offers while also depopulating itself of policies.
Rates could grow by as much as 8.8%
Next week, Citizens Property Insurance executives will settle on a new rate proposal that is expected to increase home insurance premiums throughout the state from 6.9% to 8.8%. State law prohibits the organization from increasing rates by more than 10% every year. If this rate hike is improved, the average premium that homeowners pay for coverage could go up by as much as $400 annually.
Rate hikes designed to serve two purposes
The rate hikes are meant to serve two purposes. The first is to provide the organization with more financial traction, giving it the ability to overcome some of its economic struggles. The second purpose is to encourage consumers to find their homeowners insurance elsewhere. Higher rates could force consumers to seek coverage from private insurers, some of whom have been willing to take on old Citizens Property Insurance policies without introducing any significant increases to premiums.