Citizens Property Insurance Corp. Rate Increases Spark Concern in Southwest Florida

Strategic Insights -

As the state's insurer of last resort, Citizens Property Insurance Corp. is poised to increase rates for its 880,000 policyholders in Florida, with some facing hikes as high as 90 percent. The proposed increases of 23 percent for the typical customer might seem steep, but they pale in comparison to the rate increases being implemented by other standard insurance carriers. For example, USAA, State Farm, and MetLife are already showing rate increases ranging from 15 to 25 percent for their customers. The disparity in rate increases is largely due to Citizens' status as a provider for those who cannot get insurance elsewhere, requiring it to set rates higher than standard carriers.

Key Takeaways:

  • Citizens Property Insurance Corp.'s proposed rate increases range from 5.1 percent to 69.2 percent for policyholders in Sarasota County, with an average increase of 23 percent for typical customers.
  • Standard insurance carriers such as USAA, State Farm, and MetLife are implementing rate increases ranging from 15 to 25 percent for their customers.
  • More than three-fourths of the $20.5 billion in insured losses from last year's four hurricanes occurred in Florida, leading to rate hikes and other changes in the insurance industry.
  • The Florida Legislature has eliminated the practice of slapping a fresh deductible on homeowners for damage sustained in successive storms, resulting in a 1 percent to 4.5 percent rate increase.
  • Homeowners will also face a surcharge equal to 0.51 percent of their premium each year for the next five years to pay off state loans.
  • Citizens' 880,000 policies in force in Florida are divided between wind-only and all-perils coverage, with the insurer's rates based on the top 20 carriers in each territory.

Statistics:

  • 23 percent average rate increase proposed by Citizens' for its 880,000 policyholders in Florida.
  • $1,385 to $1,710 increase for the typical customer of Citizens' Property Insurance Corp.
  • 15 to 25 percent rate increases being implemented by standard insurance carriers such as USAA, State Farm, and MetLife.
  • $20.5 billion in insured losses from last year's four hurricanes.
  • 3/4 of insured losses from last year's four hurricanes occurred in Florida.
  • 5 percent statewide rate increase approved for homeowner policies issued by State Farm Florida.

Sources:

  • Herald-Tribune
  • Insurance Services Office Inc.