TALLAHASSEE, Fla. — Florida insurance regulators on Thursday afternoon considered raising rates for homeowners who use the state’s insurer of last resort. Citizens Property Insurance required a significant increase as Florida’s still volatile property insurance market continues to falter.
Rate increase to plan has an average overall growth of 13.1% in 2023 and 14% in 2024 for all personal insurance lines of citizens. Officials told Florida’s Office of Insurance Regulation, decision makers are trying to compensate for non-weather related water losses, high reinsurance costs and multiple lawsuits.
“The excess litigation has caused incredible damage to the capacity of Florida’s private insurance market,” said Tim Serio, president/CEO of Citizens Property Insurance. “This has largely led to Citizen’s policies doubling in two years from about 610,000 to more than 1.2 million.”
Florida’s former deputy insurance commissioner turned insurance advisor, Lisa Miller, said the increase is a good thing. Florida, she said, is trying to return citizens to a true last resort to reduce taxpayer liability. Higher prices, Miller noted, could also make the market more competitive.
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“If the rate at Citizens is $2,000 a year, if a private insurance company sees that policy, they can come in and offer $1,800 a year,” Miller said. “I know it seems counterintuitive that citizen rates should be the highest in Florida, but for the long-term health of our entire market, our economy … citizen rates need to be higher and continue to rise.”
The changes came at the top of more than a year of reforms. Lawmakers in Tallahassee have cut access to the courts to stop litigation, imposed more oversight on insurers and strengthened reinsurance with the promise of timely assistance.
“It was a long time ago,” Florida CFO Jimmy Patronis said after a Cabinet meeting the last month. “That’s why we had two special sessions that we held. Look, Rome wasn’t built in a day – some of these things take 12 to 18 months.’
Policyholders, however, are tired of waiting.
Willie Batts, a disabled veteran from Apopka, recently signed up with Citizens after his previous property insurance carrier offered a big renewal price increase.
“The cost of the sheet went from about $2,800 to over $15,000,” Batts said. “To say a dramatic increase, that might be a bit of an understatement.”
Batts ditched his old carrier and secured a new rate of about $3,400 a year with Citizens. Now, he’s concerned about how much that rate could increase in the coming years if the problems in the Florida market aren’t addressed.
“My message is, we’re electing you guys to go out there and represent us. And we elect you to deal with such things,” Batts said. “You know, we – we depend on you to do this.”
State officials in OIR will now take public comment until June 22. After that, they plan to make a decision. The new rates will take effect in November of this year.
