Florida’s Citizens Property Insurance Approves 2018 Rates, Policy Changes
Jun 20, 2017
At its meeting in Maitland, Florida today, June 20, 2017, Citizens Property Insurance Corporation’s (“Citizens'”) Board of Governors (“Board”) approved recommended rates and policy changes for 2018 that reflect what the State-run insurer describes as “rising non-weather water losses, assignment of benefits abuse and out-of-control litigation that, left unchecked, will force rate hikes for years to come.”
By unanimous vote, Board members recommended a 5.3 percent statewide increase for Citizens’ personal lines policyholders – homeowners, condominium unit owners and renters – with most increases concentrated in three South Florida counties where Citizens says water losses, assignment of benefits abuse and litigation are disproportionately severe.
Board members also approved a series of policy changes aimed at reducing claims costs for non-weather water losses. If approved, the changes would take effect in February 2018.
Among the major policy changes is a $10,000 cap on water loss repairs for customers who decide not to participate in Citizens’ Managed Repair Program, which links customers with a network of approved contractors. Coupled with a free emergency water removal service, the Program will become available to new Citizens policyholders on a voluntary basis after July 1, 2017, and for existing customers upon renewal.
Other policy changes include expanding obligations to third parties that accept an assignment of benefits. Currently, contractors who accept an assignment are not bound by the same obligations, such as allowing Citizens adjusters to inspect a claim in a timely manner or providing proof that a loss has occurred.
“These proposed rate increases and product changes are critical for Citizens’ efforts to bring some relief to a market that is being made increasingly expensive by unnecessary litigation and out-of-control water loss claims,” Board Chairman Chris Gardner said. “Unfortunately, we are making it more expensive for many of our customers to own a home.”
Citizens had joined other insurers, business and consumer groups pushing for reform during the 2017 Regular Legislative Session that concluded in May without any significant changes to state law regarding assignment of benefits and the one-way attorney fee statute.
“It’s ironic that our rates for wind coverage are coming down, but Citizens policyholders in South Florida still must brace themselves for continued rate increases,” Gardner said. “We don’t want to raise premiums, but Citizens is obligated by statute to set actuarially sound rates.”
Citizens’ 2018 rate proposal approved by the Board today continues a recent trend in Miami-Dade, Broward and Palm Beach counties. Homeowners with multi-peril coverage in Miami-Dade County, for example, will see an average increase of 10.5 percent, or $359, from 2017 premiums. Broward and Palm Beach county homeowners will see rates increase by 10.4 percent and 9.3 percent respectively.
Outside of South Florida, many policyholders will see rates decrease or remain flat. Citizens’ homeowners policyholders in 56 of 67 counties will see average rates decrease under the proposed rates.
Proposed rates and policy changes must be approved by the Florida Office of Insurance Regulation. Both the new rates and policy changes would take effect in February 2018.
“We were hoping for legislative change and a surgical solution,” said Barry Gilway, Citizens President/CEO and Executive Director. “Given that this did not occur in 2017, we cannot wait for the trends to worsen and take no corrective action.”
Citizens has prepared a 2018 rate kit for the media with information about its 2018 rate filing, including answers to common questions and county-by-county estimates for particular policy types. To access that information, click here.
The rate kit also includes information about Citizens’ costs and projected rate need for 2018.
To access complete materials from today’s Board meeting, click here.
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