TALLAHASSEE, Fla. – June 3, 2009 – Citizens Property Insurance officials Tuesday proposed rate increases that would raise most South Florida home and condominium owners’ premiums up to 10 percent a year for as many as five years, beginning Jan. 1.
State-backed Citizens estimates it needs to boost property insurance rates for homes, condos and businesses by a statewide average of 6 percent a year starting next year until the rates are about 44 percent higher.
Some Broward homeowners could see their rates rise as much as 74 percent over the next five years, according to the Citizens proposal.
A final rate filing will be submitted to the Office of Insurance Regulation after Citizens board members approve it later this month.
The Legislature froze Citizens rates the past few years to help drive insurance prices down after the 2004 and 2005 hurricanes.
This year, legislators passed a bill to increase annual premiums by up to 10 percent. Gov. Charlie Crist signed the bill into law last week.
State officials say the rate increases are needed to pay projected claims and other expenses. All automobile and property insurance policyholders in Florida are subject to fees to offset Citizens’ deficits if a major hurricane hits. More than half of Citizens’ 1 million policyholders live in South Florida.
Some homeowners questioned the timing of the proposed increases – during a recession and after three relatively quiet hurricane seasons.
“We are losing jobs ... and our government is raising our insurance rate, which will no doubt increase the number of foreclosures,” said Jeff Kahn, a real estate agent and homeowner in Wilton Manors. “We haven’t had a storm for a while that affected us down here. ... So what justifies these abominable rates?”
Citizens’ rate estimates are broken out by region and policy type; individual policyholders’ premiums will vary based on factors such as the age, location and strength of their homes.
Over time, the projected increases will be greater on average for policyholders in single-family homes than for condo owners.
Most rates for Broward County homeowners will increase 10 percent a year for three to five years.
Most rates for Palm Beach County homeowners will increase 10 percent a year for two or three years, except for some inland neighborhoods, which will decrease slightly.
Condo unit owners in some parts of Broward and Palm Beach counties would see average rate decreases of 2 percent to 12 percent.
But some Citizens board members, including Plastridge Insurance Agency President Tom Lynch, are pushing for a 10 percent increase for all policyholders or for the projected decreases to be “zeroed out” to help the insurer become financially sound quicker.
Susanne Murphy, Citizens’ executive vice president of corporate operations, said it’s probably not fair – or legal – to charge people more than they need to pay to cover the risk of their homes and condos. But she said Citizens would consult with the insurance regulation office before the board makes a final decision.
The legislation approved this year also allows private insurers to increase premiums up to 10 percent, pending state review.
Citizens Property Insurance can be reached at 888-685-1555 and the state’s insurance consumer help line is 800-342-2762.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla.
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