MIAMI.- Still immersed in the housing crisis in Florida, the Board of Governors of the state insurer Citizens Property Insurance Corp. gave the green light to a proposal that would raise its clients’ rates by double digits.
Under the initiative, which must be reviewed for approval by the state Office of Insurance Regulation (OIR), Citizens homeowner multiple peril (HO-3) policies could increase an average of 13.5%. Condo owners would see an average increase of 14.2%.
If the OIR approves the proposal, the new rates would come into effect when policies are renewed starting January 1, 2025.
HO-3 is the most common homeowner’s insurance policy and includes coverage of property structures and personal property.
An increase in Citizens’ rate could affect its 1.2 million customers, most of whom turn to this insurer as their last resort, unable to afford current market rates.
However, the state insurer claims that its premiums remain well below the rates presented and approved by most private insurance companies working in the state market.
Governor DeSantis, addressing the issue of the Citizens increase at a press conference in Marathon Key, maintained that “the analysis we did in 2023 showed an average difference of 30% to 40% between a Citizens policy and one on the market private… There is still a big margin. Most likely, with a 14% increase, you will continue to pay less with Citizens rates.”
Something that is in contradiction to what he himself had just expressed in that same press conference when he stated that he had observed that “some people had left Citizens to move to the private market because they had obtained lower rates.”
With this proposal, Citizens aims to raise prices to the maximum limit allowed by state regulations, which is 14% annually.
In Miami-Dade, where the average family income does not exceed $65,000, the insurer itself claims to have 96,941 HO-3 policies, whose average premium is $5,113 annually. If the state insurer’s proposal is approved, the rate in South Florida would rise to $5,804 per year. That is, $483 per month in homeowner’s insurance.
In 2023, the state insurer had a record 1.4 billion policies and created a program to transfer clients to the private market. Currently, Citizens has about 1.2 billion policies and aims to reach 900,000 so as not to be so vulnerable to catastrophes.
In this context, it is worth noting that, starting in 2025, Citizens policyholders who own homes worth more than $600,000 will be required to have flood insurance. According to Citizens, this measure will be implemented gradually and seeks to ensure that higher-value properties are adequately protected against flood damage, which is not covered by standard homeowners insurance policies (HO-3).
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