As Florida enters a new hurricane season following last year’s devastating Hurricane Ian, policyholders under Florida’s state-sponsored insurer could see rates rise by double digits.
Citizens Property Insurance Corp. is seeking a 12 percent increase for the most common coverage for primary residences, known as multiperil policies, which packages multiple types of policies together, Brian Donovan, the insurer’s chief actuary for Citizens, said during a hearing held last week by the Florida Office of Insurance Regulation, according to the Miami Herald.
While the proposal varies based on different factors, rates could rise by as much as 50 percent for homes that aren’t primary residences.
The request comes as homeowners have flocked to Citizens, which the Florida legislature created as a last resort option in 2002 after Hurricane Andrew. The category five storm, which flattened parts of the Miami region a decade earlier, was Florida’s most expensive storm in terms of recovery, costing $57.8 million adjusted for inflation, according to data by the federal government’s National Oceanic and Atmospheric Administration (NOAA).
But now Hurricane Ian recovery is set to surpass that of Andrew, costing homeowners, business owners, and the state $114 billion in recovery, making it the nation’s third most expensive storm recovery effort, per NOAA.
This year, Citizens’ policyholder count has swelled to nearly 1.2 million — triple from its lowest count just four years ago. Citizens’ reserves have dropped by 33 percent largely due to losses tied to Hurricane Ian, Citizens CEO Tim Cerio said during the hearing.
Florida lawmakers are keen to reduce consumer’s reliance on the State-owned carrier. In response to at least six Florida insurance companies becoming insolvent last year, and another 27 having their credit ratings downgraded, lawmakers overhauled home insurance laws, essentially bailing out the industry. The legislation included a $1 billion taxpayer-backed reinsurance program for insurance companies.