Florida’s Citizens Property Insurance Board Approves Proposed 2016 Rates

At its meeting in Orlando today, June 24, 2015, Florida’s Citizens Property Insurance Corporation’s (“Citizens”) Board of Governors (“Board”) unanimously approved a 2016 rate package that the State-run insurer explained lowers rates for nearly half of Citizens’ Personal Lines policyholders.  

The recommended rates also were described as being responsive to a “continued spike” in southeast Florida-based water damaged claims and “continued inadequate rates” for Citizens’ remaining policyholders along the coast, including South Florida. The rate package includes an overall increase of 3.2 percent for Citizens’ Personal Lines policyholders.

To view the rate filing document, click here.

According to a news release issued just after the Board meeting’s conclusion this morning, most inland policyholders will see rate reductions under the proposal to be submitted in July to the Florida Office of Insurance Regulation (“OIR”), which must approve any rate changes.  Inland homeowners will see an average 1 percent decrease in multi-peril rates, while inland mobile homeowners will see rates reduced by 7.4 percent.

Coastal homeowners will see average multi-peril increases of 8.6 percent, while mobile home owners and condominium owners will see rates rise by up to 10.2 percent. Personal Lines policyholders clustered in Palm Beach, Broward, Miami-Dade and Monroe counties will see the bulk of the increases, which Citizens attributed to the legislative “Glide Path” established to bring those rates in line with the private market. 

“Every year, Citizens’ actuaries calculate rates based on the same methodology used by insurance companies all over the world, which compares potential risk to the ability to pay claims,” Board Chairman Chris Gardner explained.  “We are focused on maintaining a transparent process that both the public and the Office of Insurance Regulation can appreciate.”

Since January 2014, nearly 550,000 policies have been transferred from Citizens to private companies. From a 2012 peak of nearly 1.5 million policyholders, Citizens continues to insure 573,000 personal lines customers as the state’s “insurer of last resort.”  Citizens reminded that, of those policyholders, 255,000 are expected to see lower rates.

Citizens has prepared a 2016 rate kit that contains information about its 2016 rate filing.  To view the kit, click here.

A complete report on today’s Board meeting is forthcoming.

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