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Citizens insurance premiums could jump 20 percent

A move to raise Citizens Property Insurance rates is picking up steam.

Senate President Jeff Atwater, R-North Palm Beach, said Thursday that legislators will let a three-year rate freeze for homeowners with policies under state-run Citizens expire this year. That means homeowners will start seeing higher bills — perhaps up to 20 percent higher — starting in 2010.

"We will have to allow Citizens' rates to begin to move closer to market-driven rates," Atwater said. "I will do so carefully and thoughtfully so that there's not an extraordinary knee-jerk that falls on the citizens of Florida that are so dependent on Citizens coverage."

Atwater's comments came the same day as a final meeting of a task force looking to return Citizens Property Insurance Corp. to its original status as an insurer of last resort. Earlier this month, task force members endorsed a recommendation that Citizens be allowed to gradually raise its rates, starting next year.

The task force suggests the Legislature cap Citizens' annual rate increase at a 10 percent statewide average. It also calls for an annual cap of 15 percent for any given territory and 20 percent for any single policy.

Without a plan to implement the increases gradually, Citizens policyholders face rate hikes of 20 to 30 percent next year, said Bruce Douglas, task force chairman and a former board chairman of Citizens Property.

Citizens hopes the increases will encourage property owners to take their business elsewhere, making it a smaller company.

Citizens has to file a rate case with the Florida Department of Insurance in July. Coastal home­owners and condo owners will be hit hardest by the increases.

State-backed Citizens was created by the Legislature in 2002 as an insurer of last resort for homeowners who could not get property insurance from other companies, but it has become the state's largest insurer with 1.1-million policies and $412-billion in exposure.

The task force is due to submit its report to the House, Senate and governor by Jan. 31.

Citizens insurance premiums could jump 20 percent 01/22/09 [Last modified: Thursday, January 22, 2009 10:38pm]

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