Homeowners in much of St. Petersburg and Hillsborough County can expect refreshingly deep cuts in their Citizens Property Insurance premiums.
It's another story for their fellow Citizens policyholders in inland Pasco County. They can brace for a 10.4 percent rate hike.
Statewide, Citizens' homeowners insurance rates are slated to rise 5.4 percent on average effective Jan. 1 under an order approved this week by Florida Insurance Commissioner Kevin McCarty.
But "average" is a bit misleading. Policyholders will swing between double-digit increases and near double-digit rate decreases depending on where they live.
For instance, St. Petersburg residents with Citizens' homeowners policies can budget for an average 9.3 percent drop. In Tampa, it's an 8.6 percent decrease. But much of Hernando County is looking at a 10.3 percent increase.
The wide range is due to state-run Citizens changing the way it calculates rates. It has abandoned the long-standing practice of comparing the top 20 insurance providers in every county and setting its rates higher than those insurers. Now, the company is trying to gradually adjust rates to better reflect what it should be charging.
"This is the first time Citizens has filed for actuarially sound rates on its book of business," company spokesman John Kuczwanski said.
Tom Zutell of the Florida Office of Insurance Regulation said the rejiggering of rates was compounded by a three-year freeze on Citizens' rates that the state Legislature agreed to end this year.
"The rate freeze . . . applied to all Citizens' rates: those that were actuarially too low (homes on the coast) and those that were too high (homes in inland counties)," Zutell said in an e-mail. "Actuarially sound means charging the correct rate for the risk . . . whether that means an increase or a decrease."
Most of the big decreases are in rural inland counties and noncoastal policies, with inland Pasco County one of the exceptions.
Roberta Sasek of Trinity was exasperated to hear she'll face a potential double-digit hike. Sasek was recently dropped by Homewise Preferred Insurance Co. and has a new policy with Citizens effective in December. She plans to shop around when she gets the premium boost next year.
"We do this every year; it's like income taxes," she said.
"What I don't understand is how they get away with this."
In ending the freeze, the Legislature also said the state-run insurer cannot raise rates more than 10 percent annually starting next year.
Citizens actuaries have calculated that rates would have to rise about 40 percent on average for homeowner policies and as much as 140 percent on wind-only policies to cover the company's exposure to hurricane claims.
Business trade group Associated Industries of Florida unsuccessfully lobbied McCarty to raise Citizens rates by 10 percent across the board.
Associated Industries president Barney Bishop argued at a hearing this month that an underfunded Citizens puts all insured Floridians at greater risk. Under state law, Citizens is allowed to assess insurance consumers statewide if it cannot cover claims after a major storm.
Citizens, which covers those who cannot find coverage on the open market, is the largest property insurer statewide with more than 1 million policies. That total includes about 350,000 homeowners policies, almost 112,000 of them in the Tampa Bay area alone.
For other personal insurance lines, McCarty gave Citizens permission to raise average rates 8.8 percent for dwelling fire and 1.7 percent for mobile-home owners. Among other policy types, Citizens can raise average rates 2.1 percent for mobile-home physical damage and 10.2 percent for commercial property residential-condo associations.
McCarty's office said some categories show higher increases than the 10 percent cap because the law allows companies to pass on to policyholders some of the cost of their premiums paid to the Florida Hurricane Catastrophe Fund. The Cat Fund can be tapped to help insurers pay claims after a major storm.
Barring some minor adjustments, the increases were close to what Citizens' board had requested.
The approval does not include Citizen's high-risk accounts, such as those with wind-only policies in coastal areas. Citizens wants to raise rates for 256,000 affected homeowners by 7.7 percent on average. A separate hearing on that rate filing is slated for Nov. 10.