After waiting to approve the rates for 2021 last month, the Board of Directors of Citizens Property Insurance Corporation approved rate recommendations that the insurer says will make its rates more competitive with the private market to keep the flow of policyholders returning to the market. Florida insurer as a last resort. .
The Citizens Board approved rate recommendations for 2021 calling for an average statewide increase of 7.2 percent for personal line policyholders – homeowners, condominium unit owners, mobile home, residential and tenant owners. If approved by the Florida Office of Insurance Regulation (OIR), the 2021 rates would become effective for policies that renew after August 1, 2021.
Homeowners' policies would increase by an average of 6.1 percent. Condo owners would see an average increase of 9.4 percent. The rates for tenants would increase by an average of 4 percent.
The board also approved a recommendation that new policyholders pay actuarially healthy rates instead of joining the insurer with capped premiums that existing Citizens policyholders receive. If approved by OIR, the recommendation would increase tariffs for new production by an average of 21 percent. Florida State Senator Jeff Brandes had urged the insurer to make these changes as the Florida market becomes tight and policyholders flock to the public. A recent report commissioned by Citizens also found that the insurer must make changes to the citizen's glide path for rate increases.
In a related vote, the board urged OIR to maintain the limits for new business in Monroe County at 10 percent above the rate charged to renew policyholders.
The steps are because the number of residents has increased from 443,000 to 552,000 in the past year, an increase of 19.7%. Higher-than-expected losses from Hurricanes Irma and Michael, coupled with persistently high litigation and reinsurance costs, have prompted many private insurers to increase rates, limit coverage and exit certain markets.
"The goal here is to create a healthy Florida private insurance market that better reflects what we should be, Florida & # 39; s insurer of last resort," said Carlos Beruff, Chairman of the Board of Directors.
In December, the Citizens Board of Governors delayed action in response to a series of recommendations for 2021 tariffs calling for an average 3.7 percent increase in personal line coverage, including a 2.2 percent increase in homeowners. The council instructed Citizens' actuarial staff to work with OIR to address the growing disparity between citizen and private insurance company rates in many parts of the state.
Citizens are required by law to recommend actuarially justified rates, while adhering to a legislative glide path that limits individual rate increases to 10 percent, excluding changes in coverage and surcharges. Meanwhile, private insurers are receiving rate increases well above the 10 percent cap, widening the premium gap between private insurers and citizen policies.
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