Task force suggests rate hike for Florida
JACKSONVILLE (AP) – A task force looking to return Citizens Property Insurance Corporation to its original status as an insurance company of last resort recommended Thursday that lawmakers increase homeowner rates by as much as 20 percent.
The task force met in Jacksonville to finalize its report due Jan. 31 to the House, Senate and governor.
“Our task is giving the Legislature options,” said former Senate President Locke Burt, one of the task force members.
The 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 Citizens Property Insurance Corporation Mission Review Task Force was formed to recommend changes that would return Citizens to its original concept.
Earlier this month, the task force voted to recommend that the Legislature cap Citizens’ annual rate increase at 10 percent on average statewide. It also suggested an annual cap of 15 percent for any given territory and 20 percent for any single policy.
The 10 percent increase was viewed as an incremental step toward higher premiums.
Bruce Douglas, task force chairman and a former chairman of the board of directors of Citizens Property, said without the decision to gradually increase rates that customers of Citizens would have been subjected to rate hikes of 20 to 30 percent.
Senate President Jeff Atwater, R-North Palm Beach, said he supports the incremental increases.
“We will have to allow Citizens’ rates to begin to move closer to market driven rates,” Atwater told reporters and editors at the annual Associated Press legislative planning meeting. “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.”
Citizens’ rates have been frozen for three years and task force members are urging the state to allow Citizens to begin raising them in January 2010.
“We cannot continue on with a freeze,” Douglas said.
Citizens hopes the rate increases will force property owners to take out policies with other insurance companies and make Citizens a smaller company.