TALLAHASSEE — Homeowners who have policies with Citizens Property Insurance Corp. will see their premiums rise an average of 6.3 percent next year, the fifth consecutive increase in rates from the state-run insurer.
The average premium increase approved Monday by the Florida Office of Insurance Regulation comes on the heels of a 10.8 percent hike approved last year, but is less than the 7.9 percent sought by Citizens as part of its aggressive attempt to shed policies.
Homeowners with standard "multi-peril" lines will pay an additional $111 on average when their policy renews next year. Those with wind-only residential policies will pay an average increase of $265 more, or 10.5 percent, and businesses with commercial lines coverage will see a 10 percent hike.
Since 2009, standard Citizens homeowners policies have increased 43 percent. Officials say the company's rates remain below the private market.
"We are grateful to OIR for its diligence in reviewing Citizens' 2014 rates and pleased that it has agreed with our overall approach," Citizens president and CEO Barry Gilway said in a statement. "The agency's action will allow Citizens to continue providing quality service to our 1.2 million policyholders while reducing the risk of assessments on all Floridians."
The rate increase, which is effective Jan. 1, will apply to fewer homeowners than in the past if 10 private insurance companies succeed in taking over nearly 400,000 policies from Citizens in the next month.
Under the "takeout" program, companies send letters to homeowners offering a private market alternative to Citizens. Homeowners have 30 days to opt out before they are automatically shifted to the private companies.
The takeout program, coupled with the decision by regulators to routinely raise rates, is part of an aggressive push by Gov. Rick Scott and the Florida Legislature to make the company less attractive to homeowners.
Citizens is the largest property insurance carrier in the state with 1.2 million policies.
Beginning in January, Citizens will also launch a new program to push homeowners with standard "multi-peril" homeowners policies into private carriers if they receive an offer from a private company. Agents, working on behalf of consumers, will be able to comparison shop for the best rates to offer people through a clearinghouse run by Citizens.