After years of the state’s Citizens Property Insurance Corp. saying it needed to increase rates, many policyholders could get a break next year.The Citizens Board of Governors on Wednesday approved a plan that includes a proposed statewide average decrease of 2.6 percent in rates for personal residential policies. That would include an average 4.1 decrease for the most-common type of homeowners policies, known as multi-peril policies, according to a summary provided to the board.Actual rate changes for policyholders would vary based on factors such as policy types and locations — with some policyholders seeing increases. Also, the proposal includes seeking an average 10.4 percent increase for commercial properties, which include condominium buildings.But Citizens officials said the proposal to ease rates for many customers stems largely from changes that the Legislature and Gov. Ron DeSantis approved in 2022 to curb costly lawsuits against insurers.“Litigation costs drive up rates for Citizens and the private sector,” Citizens President and Chief Executive Officer Tim Cerio told board members.The proposed rate changes will go to the state Office of Insurance Regulation, which would need to sign off. The changes would start to take effect June 1.Citizens was created as an insurer of last resort but saw explosive growth starting in 2020 and 2021 because of financial problems in the private market. It became the state’s largest insurer, with as many as 1.4 million customers in 2023.For years, Citizens officials called for increasing rates, at least in part because they said the state insurer often charged less for coverage than private insurers. They said that created a disincentive for customers to get private coverage. Cerio on Wednesday described past Citizens rates as “woefully actuarially unsound.”But the efforts to increase rates drew opposition, at least in part because policyholders in some parts of the state said they could only get coverage through Citizens. Among the heaviest opposition came from Monroe County.During the past two years, the number of policies in Citizens has steadily declined. While a key part of that reduction involves what is known as a “depopulation” program to shift policies from Citizens to private insurers, officials also say the legal changes under the 2022 law have helped lead to private carriers wanting to write coverage in the state.Citizens had 436,420 policies as of Friday and is projected to be down to about 385,000 policies by the end of the year, according to Citizens.Charlie Lydecker, an insurance executive who serves on the Citizens Board of Governors, said Wednesday that private insurers have “cherry picked” Citizens policies through the depopulation process, taking the most-appealing policies. That is leaving Citizens with policies that private insurers don’t want because of factors such as homes’ locations.Cerio said cherry picking is “not a bad thing.”“These are good policies that belong in the private market,” he said.Stay up-to-date: The latest headlines and weather from WPBF 25
After years of the state’s Citizens Property Insurance Corp. saying it needed to increase rates, many policyholders could get a break next year.
The Citizens Board of Governors on Wednesday approved a plan that includes a proposed statewide average decrease of 2.6 percent in rates for personal residential policies. That would include an average 4.1 decrease for the most-common type of homeowners policies, known as multi-peril policies, according to a summary provided to the board.
Actual rate changes for policyholders would vary based on factors such as policy types and locations — with some policyholders seeing increases. Also, the proposal includes seeking an average 10.4 percent increase for commercial properties, which include condominium buildings.
But Citizens officials said the proposal to ease rates for many customers stems largely from changes that the Legislature and Gov. Ron DeSantis approved in 2022 to curb costly lawsuits against insurers.
“Litigation costs drive up rates for Citizens and the private sector,” Citizens President and Chief Executive Officer Tim Cerio told board members.
The proposed rate changes will go to the state Office of Insurance Regulation, which would need to sign off. The changes would start to take effect June 1.
Citizens was created as an insurer of last resort but saw explosive growth starting in 2020 and 2021 because of financial problems in the private market. It became the state’s largest insurer, with as many as 1.4 million customers in 2023.
For years, Citizens officials called for increasing rates, at least in part because they said the state insurer often charged less for coverage than private insurers. They said that created a disincentive for customers to get private coverage. Cerio on Wednesday described past Citizens rates as “woefully actuarially unsound.”
But the efforts to increase rates drew opposition, at least in part because policyholders in some parts of the state said they could only get coverage through Citizens. Among the heaviest opposition came from Monroe County.
During the past two years, the number of policies in Citizens has steadily declined. While a key part of that reduction involves what is known as a “depopulation” program to shift policies from Citizens to private insurers, officials also say the legal changes under the 2022 law have helped lead to private carriers wanting to write coverage in the state.
Citizens had 436,420 policies as of Friday and is projected to be down to about 385,000 policies by the end of the year, according to Citizens.
Charlie Lydecker, an insurance executive who serves on the Citizens Board of Governors, said Wednesday that private insurers have “cherry picked” Citizens policies through the depopulation process, taking the most-appealing policies. That is leaving Citizens with policies that private insurers don’t want because of factors such as homes’ locations.
Cerio said cherry picking is “not a bad thing.”
“These are good policies that belong in the private market,” he said.
Stay up-to-date: The latest headlines and weather from WPBF 25
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.