Citizens announces rate reductions for 2015, affecting most of the insurer’s policies
Florida’s Citizens Property Insurance, the state’s largest provider of homeowners insurance coverage, has announced rate reductions for 2015. This will be the first time the state-run insurance organization has been able to offer a rate reduction in several years. The insurer has been facing monumental financial problems recently and has been struggling to overcome these issues while also complying with it duty to provide coverage to its policyholders. The forthcoming rate reduction may go a long way in improving the tarnished relationship that the organization has with its customers.
Rates for typical coverage could fall by an average of 6.3%
The rate reductions are likely to affect several types of policies offered by the insurer. A typical homeowners insurance policy will see an average rate reduction of 6.3%. The same type of coverage for mobile homes will see an average reduction of 5.1%. Rate reductions must still be approved by the Citizens board of directors, but the organization is confident that any reductions that have been approved will be close to the estimates it has provided.
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Rate increase proposals from Citizens Property Insurance are still in the works
While rate reductions are on the way for Citizens policyholders in 2015, there are many rate increase proposals that are still awaiting approval. When these rate increase proposals are taken into account, the average rate reduction that policyholders can expect to see next year will be 1% or less. Some of the rate increase proposals in question are only meant to affect coastal communities and commercial properties that have certain types of hurricane coverage.
State-run insurance company plans to continue shedding policies in order to skirt financial risks
Citizens is also still planning to shed policies in order to reduce its exposure to financial risks. These policies will be taken up by other insurance companies in the coming year. The rates that these policies had under Citizens will remain intact with their new insurance company as well. This initiative is part of legislative action aimed at resolving the state-run insurer’s financial problems.