Citizens Releases 2016 Rate Press Kit
June 22, 2015 - Tallahassee, FL
Citizens Property Insurance Corporation’s Board of Governors on Wednesday will be asked to approve a 2016 rate package that lowers rates for nearly half of Citizens’ personal lines policyholders while responding to increased water loss claims and continued inadequate rates along the coast.
Following an unprecedented depopulation effort that has transferred nearly 550,000 policies to private companies since January 2014, Citizens continues to protect 573,000 personal lines customers as the state’s insurer of last resort. Of those, 255,000 are expected to see lower rates.
Most Citizens’ inland policyholders will continue to see decreases in 2016, with homeowners receiving an average 1 percent drop in multiperil rates while inland mobile home owners will see rates reduced by 7.4 percent.
Coastal policyholders will continue to see rate hikes that reflect both the historical inadequacy of coastal rates and the higher risks associated with living along the coast. Coastal multiperil homeowners policyholders will see average increases of 8.6 percent while mobile home owners and condominium owners will see rates rise by up to 10.2 percent.
Overall, the request calls for an average statewide rate increase of 3.2 percent for personal lines policyholders. The overall increase is being fuelled by a continued spike in water loss claims in southeast Florida and the fact that most coastal policies with nearly adequate rates have found coverage with private market insurance companies.
Affordable reinsurance and depopulation efforts over the past several years have allowed Citizens to boost its claims paying ability. For the first time since its creation, Citizens can now handle a 1-in-100 year storm along the coast without having to levy assessments on Florida policyholders.
Citizens is required by law to recommend rates that are actuarially sound while complying with a legislative glide path that caps rate increases at 10 percent, excluding coverage changes and surcharges. In July, Citizens will submit its 2016 recommended rates to the Office of Insurance Regulation, which must establish rates for Citizens before they take effect.
Citizens has prepared a 2016 rate kit to provide members of the press with information about its 2016 rate filing. Additional information and answers to common questions about Citizens' rates and premiums are included in Citizens 2016 Rates Frequently Asked Questions. Also included in the kit are several documents that provide useful information about Citizens' costs and projected rate need for 2016.
In 2002, the Florida Legislature created Citizens Property Insurance Corporation (Citizens), a
not-for-profit alternative insurer, whose public purpose is to provide insurance to, and serve the needs of, property owners who cannot find coverage in the private insurance market.