Florida’s government-backed home insurance company is planning to hike rates by 14% — another blow for more than a million residents of the hurricane-battered state that is saddled with some of the highest premiums in the country.
The board of governors of the Citizens Property Insurance Corporation voted unanimously on Wednesday to boost rates for next year — this despite the fact that nine private insurers in the state have filed to cut their rates while 10 others have made it known they intend to keep their rates flat for 2025.
The rate hike is pending approval from state regulators.
“Paying because you’re paying for the paradise…of course. I agree. We have to pay a little more…but how much more? Too much. It’s too much,” Sofia Bereza, a Tampa area resident, told WFTS-TV on Wednesday.
Bereza said she considered a Citizens policy but that regardless of which company offered home insurance, the prices were steep.
A combination of more intense storms and hurricanes as well as soaring inflation have sent insurance premiums skyrocketing.
“You know it’s unfortunate, but I also understand that inflation has caused a whole mess of trouble, and then on top of that, the climate is not what it used to be as well, so we are hit with a lot of storms that were unexpected,” Frances Druding, another Tampa area resident, told WFTS-TV.
Primary home owners will have to pay 14% more while those with secondary homes — defined as residences that are occupied nine months or less each year — will be required to pay 50% more.
While the 14% hike is substantial, Citizens rates are still on course to be substantially lower than those offered by other insurers.
Homeowners in Miami-Dade County with Citizens policies that cover fire, theft and windstorms would see premiums rise from average of $5,113 to $5,804, according to data compiled by the Miami Herald.
Broward County residents who are signed up with Citizens would see premiums rise from an average of $5,385 to $6,112.
In less expensive parts of the state such as Hillsborough County which surrounds Tampa Bay, average premiums would rise from $2,667 to $3,028.
In neighboring Pinellas County, which encompasses Clearwater and St. Petersburg, premiums would rise on average from $2,854 to $3,234.
Citizens, the state’s largest insurer, was created by the Florida state legislature in 2002 as a last-resort option for residents who were unable to find policies on the open market.
The current board of Citizens is comprised of lawyers and business executives who were appointed by Florida’s Republican governor, Ron DeSantis, and the GOP-led state legislature.
By law, Citizens insurance rates are capped. In recent years, however, lawmakers voted to raise the caps.
In 2022, Florida lawmakers required Citizens policyholders to get flood insurance by March 2027.
Any Citizens policyholder who owns a home valued at $500,000 must get flood insurance by March 1 of next year.
While Florida has seen a population explosion in recent years thanks to its low-tax and business-friendly climate that has attracted residents from blue states such as New York and California, its home insurance market has been unstable.
In March, an analysis conducted by S&P Global Market Intelligence found that insurance companies in Florida made money last year for the first time in seven years.
A group of around 50 insurers reported $147.3 million in net income for 2023, compared to net losses of more than $1 billion in each of the previous two years, according to the analysis.
While the group of insurers still had collective underwriting losses of $190.8 million, it was much smaller than in past years, when it was almost $1.80 billion in 2022 and $1.52 billion in 2021, S&P Global Market Intelligence said.
Devastating storms such as Hurricane Andrew in 1992 and subsequent weather events have wiped out some insurers in the state while deterring others from doing business there.
Last year, Farmers Insurance said it was discontinuing new coverage of auto, home and umbrella policies in Florida, and AAA said it had decided not to renew “a very small percentage” of homeowners and auto insurance policies.
Nine insurers have been declared insolvent or merged into other companies in Florida since 2021.
Average annual property insurance premiums jumped 42% last year to $6,000 in Florida, compared to a national average of $1,700.
DeSantis and the state legislature has grappled with the issue in 2021 and 2022, including holding a special session, but most of the focus was on shielding insurance companies from lawsuits and setting aside money for reinsurance to help protect insurers.
The insurance companies are optimistic that the changes have reduced expenses, particularly the costs to litigate claims.
Additionally, Florida regulators this year have approved six property and casualty insurers to start writing residential property insurance policies, S&P Global Market Intelligence said.
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