It’s no secret that both state lawmakers and policyholders have always had a somewhat tenuous relationship with Citizens Property Insurance Corporation, the nonprofit government entity created back in 2002 as a means of providing property insurance to the owners of homes, condominiums and businesses here in the Sunshine State who cannot secure the necessary coverage on the private market.
Indeed, one of the primary reasons for this reality is Citizens Property seemingly regular requests for increases in premiums, which essentially serve to fund the state-run insurance behemoth.
As it turns out, the relationship between these parties is likely to become even frostier given Citizens Property’s recent request for a sizeable rate hike.
What exactly are the rates hikes sought by Citizens Property?
Citizens Property is looking to increase rates for personal line policies, including condominiums, mobile homes, renters and homeowners, by a statewide average of 6.8 percent for 2017.
Furthermore, they are looking to increase rates for multi-peril insurance, the most common type of homeowners’ insurance that covers everything from hurricanes to fires, by an average of 9 percent for policyholders in the tri-county area. This is just short of the 10 percent maximum allowed under state law.
How much more exactly would policyholders in the tri-county area be paying?
According to reports, the requested rate hikes would affect roughly 79,000 policyholders in the tri-county area and break down as follows:
- Miami-Dade County: 9.1 percent rate increase, bringing annual average from $3,200 to $3,493
- Palm Beach County: 9 percent rate increase, bringing annual average from $2,448 to $2,668
- Broward County: 8.9 percent rate increase, bringing annual average from $2,661 to $2,897
Why is Citizens Property requesting this rate hike?
Officials indicate that the rate hike was necessitated by the sharp increase in assignments of benefits by homeowners to water damage companies.
Specifically, many of these water damage companies providing services for appliance malfunctions and plumbing mishaps compel homeowners to sign over their right to collect benefits from the insurance companies.
As such, they have the right — and have been exercising it regularly — to file a lawsuit in the event that Citizens Property fails to pay or underpays an invoice. This phenomenon, says Citizens Property, is causing significant losses and especially prevalent in South Florida.
Indeed, the insurer has urged state lawmakers to curtail this practice.
What happens now?
Once the proposed rate increases are inevitably approved by Citizens Property’s Actuarial Committee and the Board of Governors, they will be presented to the Florida Office of Insurance Regulation for a rate hearing later this summer and, if approved, they would take effect for all new and existing policies starting in February 2017.
Stay tuned for updates.
If you have questions or concerns relating to any insurance law matter, including denied or delayed payments under a homeowners’ policy, consider speaking with an experienced legal professional.Share