TALLAHASSEE — The state's largest property insurer authorized rate increases for nearly 1.5 million policyholders on Wednesday that could cost some homeowners needing sinkhole protection up to several hundred dollars more each year.
The Citizens Property Insurance Corp. board approved an average hike of 32.8 percent on sinkhole policies for homeowners and 6 percent for standard coverage. The board initially sought higher rates, voting in September to cap rate hikes for sinkhole coverage at 50 percent in 2012. But state regulators cut that to a statewide average of 6.2 percent for standard coverage and a cap of 32.9 percent for sinkhole policies.
The sinkhole problem won't go away soon, either. Board members were told that the average loss in sinkhole claims was about $60,000, and more claims are being filed.
"We will certainly experience more sinkhole claims this year than we did last year," said Citizens president Scott Wallace, who noted that a majority of the insurer's business is on older, lower-value homes. Most of the new business is being written in southeast Florida and the Tampa area.
The new rates on homeowners and dwelling fire policies take effect Jan. 1 for new and renewal multiperil business, and Feb. 1 for new and renewal wind-only business.