Citizens Property Insurance has South Florida clawing with North Florida?

July 27 meeting in which Citizens Property Insurance is scheduled to finalize the rate increase request and it will be submitting to state regulators.

Citizens Property Insurance officials again proposed a reduction in coverage. The insurer wants to place a $15,000 limit on various water damage claims from plumbing and air conditioning leaks. Reportedly, water damage claims represent the top non-catastrophic and non-sinkhole losses for

Citizens Property Insurance.

The rate filing is expected to include not only the 7.4 percent rate increase on homeowner’s policies but also a 9.6 percent rate increase in renters, a rate hike of 8.7 percent on condominium owners’ policies, and 2.8 percent rate hike on mobile home policies throughout the State of Florida. If the rate increases are approved some areas of the State of Florida specifically South Florida would be heavily affected other parts of the State may not be as affected by the rates.

The vast differences in how the rate increase affects the people of the State depending on where they reside is causing lawmakers from Northern and Southern Florida to be on opposite sides of the fence of approving the increased rates. This dispute may not be complete by the July 27th deadline and a decision will be made.

If rates are raised so that the “GAP in premium” is decreased between Citizens Property Insurance and the private market that may be great for the Northern part of the State, however with very few private market options available for homes in South Florida that may not help as much as it would hurt. This circumstance brings out the issue for representatives of South Florida. South Floridian representatives are saying why should South Florida open up to higher assessments without much benefit.

There may be a middle ground however it would take much more than just rate increases to resolve. Homeowner’s carriers are approved to write business in the entire State of Florida. Unfortunately shortly after they open they start to “cherry pick” the more lucrative business, Northern Florida, and leave the business with minimal to extreme increased exposure to Citizens Property Insurance. The issue with this is that Citizens Property Insurance was not designed for “minimal exposure” Florida properties it was designed as a “last resort” or Florida properties with no other choice.

It seems as if there will be additional increases for sinkhole coverage. Citizens Property Insurance indicated it needs a 263 percent increase in sinkhole rates on homeowners’ policies throughout the State of Florida. However, the board is likely to phase in any rate demand as was the case last year when it agreed to a one-year increase over 36 percent.