The fate of a 6.8 percent statewide rate hike for Citizens Property Insurance will be in the hands of Florida’s new insurance commissioner, David Altmaier.
Citizens’ board unanimously approved the increase as expected Wednesday, ending a brief respite from higher rates for most of its customers outside south Florida.
The filing will be headed to Altmaier’s office in July, and the Florida Office of Insurance Regulation will likely hold a public hearing in August before acting on the request.
After a decade of hurricane-free years, Citizens has aggressively shrunk its risk and strengthened its finances. Another nagging problem, sinkhole claims, has also abated after the rules for coverage were changed by the Legislature.
But another major obstacle has surfaced in recent years: rising, expensive claims for water-related damage that are being filed by contractors and attorneys on behalf of homeowners who have agreed to let them represent them. Typically, the claims are filed after the work has already been done and such cases often lead to litigation.
Property insurers statewide, including Citizens, have unsuccessfully lobbied the Legislature to restrict the practice, which they say has been ripe for abuse.
Initially a south Florida problem, it’s now becoming more prominent in Tampa Bay and elsewhere in the state.
“This is a crisis – and it’s a crisis not only for Citizens, but for the entire industry,” Citizens CEO Barry Gilway told the board during a morning meeting in Maitland.
If not for the spike in water-damage cases, rates would likely be going down in much of Tampa Bay as they did this year.
Instead, many of Citizens customers in the bay area are likely to see rates rise. Hardest hit would be policyholders in Pasco and Hernando counties, where rates on all personal line accounts – which include standard homes, condos and manufactured homes – would go up 6.7 percent and 4 percent, respectively. In Hillsborough and Pinellas counties, there would be a more muted average increase of 2.1 percent, while rates would drop 2.1 percent in Citrus County.
For multi-peril homeowner policies, the most common type of Citizens’ coverage, rates would rise 7.1 percent in Pasco, 4.3 percent in Hernando and 3.1 percent in Hillsborough. Rates would drop 7 percent in Citrus and stay flat in Pinellas, falling 0.3 percent.