Florida OKs insurance rate hikes for Citizens

By Palm Beach Business.com

DELRAY BEACH —  If you get insurance from Citizens Property Insurance Corp., chances are you’re going to pay a bit more during the upcoming year.

Florida Insurance Commissioner Kevin McCarty on Friday signed an order hiking homeowner rates an average of 5.2 percent statewide as part of an effort to gradually make Citizens rates “actuarially sound,” or reflective of the risk posed.

Citizens, the state-sponsored insurance pool, is the largest insurance company in Florida, with more than 1.07 million policies of all types, including about 100,000 in Palm Beach County and about 144,000 in Broward.

“Recent legislation requires this office to establish the rates for Citizens’ policyholders, and our actuaries did that in their usual deliberative and disciplined manner,” McCarty said. “The intent of the legislation is to annually adjust Citizens’ rates so they become actuarially sound.”

The Florida Legislature capped Citizens’ annual rate increases at 10 percent, but one line of business, mobile homes, shows a higher increase because the law allows insurance companies to pass on certain costs paid to the Florida Hurricane Catastrophe Fund to policyholders, which is not subject to the 10 percent limit.

The order also included technical guidelines to be followed when the next rate filings are made in 2010, and requires Citizens to respond to concerns raised regarding Monroe County rates.

The following are the approved statewide average high-risk account rate increases included in the order:

— Homeowners: 5.2 percent.

— Dwelling fire: 4.0 percent.
 
— Mobile homeowners: 11.0 percent.
 
— Nonresidential commercial property: 9.3 percent.
 
— Residential commercial property excluding condo associations: 9.4 percent.

— Commercial property residential, condo associations: 9.4 percent.