Florida’s government-backed home insurance company is planning to raise rates by 14% — another blow to more than a million residents of the hurricane-ravaged state that is saddled with some of the highest premiums in the country.
Citizens Property Insurance Corp.’s board of governors voted unanimously Wednesday to raise rates for next year — despite the fact that nine private insurers in the state have filed to lower their rates and 10 others have know that they intend to keep rates flat for 2025.
The rate increase is pending approval by state regulators.
“Paying because you’re paying for heaven… of course. I agree. We have to pay a little more…but how much more? A lot. It’s a lot,” Sofia Bereza, a Tampa-area resident, told WFTS-TV on Wednesday.
Bereza said she considered a policy for citizens, but no matter which company offered home insurance, the prices were high.
A combination of more intense storms and hurricanes, as well as rising inflation have caused insurance premiums to skyrocket.
“You know it’s unfortunate, but I also understand that inflation has caused a whole mess of trouble, and then the climate isn’t what it used to be, so we’ve been hit by a lot of storms that were unexpected, ” Frances Druding, another Tampa area resident, told WFTS-TV.
In a statement to The Post, Citizens said: “The rates recommended by the board today are intended to continue the move towards sound actuarial rates by reflecting the benefits gained from recent legislative reforms.”
The company said premiums “remain well below the submitted and approved rates of most private insurance companies writing in the state.”
“The proposed 2025 rates will help reduce assessment risk for non-citizen policyholders, many of whom are already paying higher premiums,” a company representative told The Post.
Primary home owners will have to pay 14% more while those with second homes – defined as dwellings that are occupied nine months or less each year – will be required to pay 50% more.
While the 14% increase is significant, Citizens rates are still on track to be much lower than those offered by other insurers.
Miami-Dade County homeowners with citizen policies that cover fire, theft and windstorms would see premiums rise from an average of $5,113 to $5,804, according to data compiled by the Miami Herald.
Broward County residents enrolled with Citizens would see premiums increase from an average of $5,385 to $6,112.
In less expensive parts of the state like Hillsborough County surrounding Tampa Bay, average premiums would increase from $2,667 to $3,028.
In neighboring Pinellas County, which includes Clearwater and St. Petersburg, premiums would increase from $2,854 to $3,234 on average.
Citizens, the state’s largest insurer, was created by the Florida state legislature in 2002 as a last-ditch option for residents who were unable to find policies on the open market.
Citizens’ current board is made up of attorneys and business leaders who were appointed by Florida’s Republican governor, Ron DeSantis, and the GOP-led state legislature.
By law, citizens’ insurance rates have been capped since 2007. However, in recent years, lawmakers have voted to raise the limits.
The company said Citizens’ fares have not been adequate for many years due to the fare cap, “which is why we are not lowering fares like other carriers in some cases.”
In 2022, Florida lawmakers required Citizens policyholders to obtain flood insurance by March 2027.
Any Citizens policyholder who owns a home worth $500,000 must obtain flood insurance by January 1 of the following year.
While Florida has seen a population explosion in recent years thanks to its low-tax, business-friendly climate that has drawn residents from blue-chip states like New York and California, its home insurance market has been volatile.
In March, an analysis by S&P Global Market Intelligence found that insurance companies in Florida made money last year for the first time in seven years.
According to the analysis, a group of about 50 insurers reported $147.3 million in net income for 2023, compared with net losses of more than $1 billion in each of the previous two years.
While the group of insurers still had collective insurance losses of $190.8 million, it was much smaller than in previous 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 preventing others from doing business there.
Last year, Farmers Insurance said it was discontinuing new coverage on 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 filed for bankruptcy or merged into other companies in Florida since 2021.
Average annual property insurance premiums rose 42% last year to $6,000 in Florida, compared to a national average of $1,700.
DeSantis and the state legislature have grappled with the issue in 2021 and 2022, including holding a special session, but much of the focus has been on protecting insurance companies from lawsuits and earmarking reinsurance money to help protect insurers. .
Insurance companies are optimistic that the changes have reduced costs, especially litigation costs.
Additionally, Florida regulators this year have approved six property and casualty insurers to begin writing residential property insurance policies, S&P Global Market Intelligence said.
By postal wire