- Florida's Citizens Property Insurance Approves Statewide Average Seven Percent Rate Increase for 2014
- July 3, 2013
- Law Firm: Colodny Fass Talenfeld Karlinsky Abate Webb P.A. - Fort Lauderdale Office
Meeting in Miami today, June 26, 2013, Florida's Citizens Property Insurance Corporation's ("Citizens") Board of Governors ("Board") approved rates for 2014 that call for a statewide average increase of seven percent and continue a phase-in of sinkhole increases in sinkhole-prone regions of the state.
For single family homeowners, the proposed increase will average 6.6 percent for non-sinkhole coverage under a slate of recommendations that will be submitted to Florida regulators for approval later this year. Overall, the statewide average personal residential premium rate in 2014 is estimated to be $2,112 for non-sinkhole coverage.
According to a Citizens news release issued after today's Board meeting, the overall rate need and capped increases approved by the Board are lower than the 2013 filing. The Board also approved a slower phase-in of sinkhole rates than what was approved last year in targeted counties.
"The rates approved today by the Board indicate that Citizens is moving in the right direction," said Citizens President and CEO Barry Gilway. "What took place today represents a measured approach. The Board continues to make the tough, but necessary decisions while recognizing the impact on Citizens policyholders."
The proposed 2014 rates will be submitted to the Florida Office of Insurance Regulation ("OIR"), which must approve them before they can take effect.
While rate increases of non-sinkhole coverage are capped at 10 percent by law, the cap does not include payments to build up cash reserves in the Florida Hurricane Catastrophe Fund.
In Pasco and Hernando counties, sinkhole rates will be limited to 20 percent of the indicated rate need. In Hillsborough County, rates will be increased by 50 percent of indicated need. A full premium will be assessed in other parts of the state, where sinkhole premiums are considerably lower and represent a much smaller percentage of overall premium.
The Board approved proposed rates based on OIR estimates for risk load, a formula used to determine how much it will cost Citizens to purchase the capital necessary to pay claims in the event of a catastrophic storm.
Answers to common questions about Citizens' rates and premiums are included in the Citizens 2014 Rates Frequently Asked Questions contained within a "rates kit" distributed by the state-run insurer yesterday. Also included in the kit are several documents that provide information about Citizens' costs and projected rate need for 2014.