Citizens board votes to lower insurance rates

TALLAHASSEE — For the first time in four years, Citizens Property Insurance wants to lower rates for nearly 70 percent of its customers.

The rate changes were recommended Wednesday at the quarterly meeting of Citizens' Board of Governors and now must go before the Office of Insurance Regulation for final approval.

The lower rates were made possible primarily because of a decline in re-insurance costs and the fact that the state has not faced a hurricane in eight years, Citizens officials said.

"It's important to recognize that for the first time in many years, Citizens has achieved actuarially sound rates for the multi-peril groups of business,'' said John Rollins, chief risk officer for Citizens, at the board meeting Wednesday.

If state regulators approve the board's recommendation, the statewide average decrease for homeowners will be 6 percent and for renters, 22 percent. Condominium owners will see their rates rise an average of 9 percent — with half of them getting the maximum 10 percent hike. Commercial property owners will see average increases of about 8 percent.

Jay Neal, president of the Florida Association of Insurance Reform, a Broward-based coalition of insurance and development companies, said that in the past, when rates were shown to be higher than needed to be actuarially sound, "they would just leave it the way it was.''

But Neal said he was not prepared to blame it on election-year politics.

The Legislature allowed Citizens to raise its rates up to 10 percent a year at the same time it increased incentives to private companies to takeover Citizens policies. The strategy worked and as of May 31, Citizens was down to 928,546 policies, from a high of 1.5 million policies two years ago.

Tom Lynch, a member of the board of governors, expressed concern that the rate decrease could lead to people choosing Citizens policies over the private carriers, especially if a hurricane hits Florida again.

"In 2007 our rates were the cheapest in the market,'' he said Wednesday. "My concern is, how fast can we recover if the market changes."

Also Wednesday, the board recommended keeping rates for sinkhole claims steady except in Hernando County, where rates will rise 10 percent.

Citizens board votes to lower insurance rates 06/25/14 [Last modified: Monday, July 7, 2014 10:35am]

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