Florida regulators hear Citizens Property Insurance’s 11% rate hike proposal

Consumers in Florida are increasingly flocking to Citizens, the state insurer of last resort, as financially vulnerable private insurance companies either seek substantial rate hikes on their own, release insurance renewals, withdraw from the state market or file for insolvency. In the last 24 months, five private insurance companies have filed for insolvency – including Avatar Property & Casualty Insurance Company and St. Johns Insurance Company this year – Citizens had pointed out.

Read more: Insurance companies on the verge of insolvency among fraud and litigation

Gilway explained in the hearing that Citizens currently has about 820,000 insurance policies. With an average of 5,500 new customers registering each week, he said the insurance company is expected to reach over one million insurances by the end of the year.

“There is no place for this business to go. Capacity [in the private market] is so limited. . . So where does it go? It comes to the citizens “, he said and added that since the citizens have lower insurance prices than private insurance companies, they are in a” ridiculous “competitive position.

If approved, the average interest rate increase of 11% for all types of insurance will take effect on August 1, 2022, although the interest rate increase may vary depending on the policyholder. Service of Florida company profile reported. According to Citizen’s chief actuary Brian Donovan, the average government premium for multi-risk insurance would increase from $ 3,044 to $ 3,371, but areas like southeast Florida would see much higher increases.

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