Florida's most important homeowners insurance company, Citizens Property Insurance, has decided to raise an average 8.8 percent statewide. This despite the $100 million profit a month that the company is currently making. Company leaders argue that the move is necessary because they fear the company's $6 billion cash surplus would be insufficient to cover a catastrophic storm season.
Push Homeowners Into Private Insurance Market
According to cbsnews.com, the board of Citizens voted on the rate increase last Friday, but it still has to be approved by the Office of Insurance Regulation. Yet, most expect the approval to be forthcoming as this is part of a campaign backed by Governor Rick Scott to make the state backed insurance company more expensive and thus, less attractive to homeowners, pushing them to the private market. In fact, board members expressly stated after the vote on Friday that the "higher rates were necessary to reduce Citizen's level of risk and make Florida more friendly to private insurance companies".
The rate hike could go up to 10.2 percent if state regulators approve instead an alternative version of Citizens proposal that included risks to cover damages should a major hurricane hit the state. The Office of Insurance Regulation has 45 days to approve or not the rate increase.
No Limits On Water Damage Coverage
However, the board decided against limiting coverage for non-flood related water damage, which is one of Citizens biggest sources of loss. Despite the fact that limiting non-flood related water damage could help save the company millions, the board felt the savings would be far too low to cover damages caused by things like bursting pipes for many homeowners. In fact, board member Nancy Baily said she was opposed to placing limits on water damages and that the company would have to continue providing coverage for this kind of losses.
Had the board placed a $15,000.00 limitation on non-flood related water damages, it could have instead chosen a lower rate increase of 7.5 percent. Another alternative would have been to place a cap on water damages, but to allow homeowners to purchase additional coverage if they choose to do so. Board members did show some disposition to revisit this alternative in the future.
The Lawyers of Greenberg Stone and Urbano Can Help
You should always have an attorney help you review your policy and advise you on what coverage you should have and for how much. If you are about to renew your policy (with the same insurer or a new one), we can help you review it and make sure you are adequately covered and in a position to avoid costly expenses should disaster strike.
With more than 67 years of combined experience, the Miami Dade County Homeowners Insurance Claims Law Offices of Greenberg Stone and Urbano have helped thousands of Homeowners all over Florida review their policies, present their claims and get the compensation owed them by their insurance carrier.
Visit our website to learn more about our firm and contact us today for a free consultation.