Citizens to lift rates by 8.2% in 2019
The board of governors of Florida-based Citizens Property Insurance Corporation has approved a statewide 2019 rate increase of an average of 8.2 percent for personal lines policyholders – homeowners, condominium owners, and renters.
The rate package reflects the continued impact of runaway litigation costs driving up rates across the state despite initiatives to reduce litigation and costs for nonweather water losses, according to a corporate statement.
If approved by the Florida Office of Insurance Regulation, the rates will be effective for new and renewal policies beginning Sept. 1, 2019.
Citizens is required by law to recommend actuarially sound rates while complying with a legislative glide path that caps rate increases at 10 percent, excluding coverage changes and surcharges, the company explained.
Since 2013, Citizens has experienced a surge in nonweather water losses – broken pipes, leaky washers, etc. – and litigation surrounding those non-hurricane related claims, especially in South Florida. Such losses have forced the state’s insurer of last resort to dip into surplus for each of the past four years, a trend that is projected to continue in 2019, the statement said.
“Unfortunately, our customers are paying the price for these exaggerated losses,” said Gary Aubuchon, interim chairman of Citizens board of governors. “The unnecessary increase in litigation continues to take a toll.”
For 2019, the recommendation would increase rates for 97 percent of homeowners with multiperil policies. In 2015, Citizens approved rate decreases for 70 percent of its multiperil homeowners policyholders.
Citizens Property Insurance Corporation was created in 2002 by the Florida Legislature as 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.
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