Revised Citizens’ Insurance Rates Approved, Raising Premiums For Most Policyholders

Jul 31, 2019

The Florida Office of Insurance Regulation has approved new rates for Citizens Property Insurance Corp. that will increase average rates for residential personal-lines policies by just under 4.7%, down from an earlier plan for an 8.2% hike. 

The majority of Citizens’ 420,000 policyholders will see rate increases, but about 67,000 will see rates go down.

Citizens has 1,961 policyholders in Duval County. The company expects at least 461, or about 23%, of those residents to see rate decreases. Most of those decreases will come to renters and mobile home owners. 

Duval’s current average premium with Citizens is $1,202. That’s expected to rise by 9.2% to $1,312.

Those numbers could change as Citizens’ actuaries review the recently approved rates.

More than half of Citizens’ policyholders are in South Florida. Duval County had 372 policyholders at last check.

Citizens was created by the state legislature in 2002 to provide insurance to Floridians who can’t find coverage in the private market.

“We are there to provide coverage on insurable property when the private market won’t offer a comparable product,” said Citizens spokesman Michael Peltier.

The new rates, which will vary for individual policyholders depending on the details of their coverage and locations, will go into effect Dec. 1, 2019. The planned 8.2% hike was approved this past December but did not take effect. 

The Citizens Board of Governors in June scaled back the planned increase after lawmakers passed a measure this spring that revamped a controversial insurance practice known as assignment of benefits (AOB). The state-backed Citizens and other insurers had blamed higher rates on fraud and litigation involving assignment of benefits, commonly known as AOB. 

“This would not have been possible without the leadership of Governor Ron DeSantis, Chief Financial Officer Jimmy Patronis, Senate President Bill Galvano and House Speaker Jose Oliva,” said Barry Gilway, Citizens’ President/CEO and Executive Director. 

In a news release issued late Monday, state Insurance Commissioner David Altmaier credited the new law (HB 7065) with helping reduce the Citizens rate hike. 

“We are pleased to see that AOB reforms passed by the Legislature are already having a positive effect on rates,” Altmaier said. “We will be closely monitoring new rate filings to ensure that cost savings are passed along to Florida consumers.” 

Assignment of benefits involves policyholders signing over claims to contractors who pursue payments from insurance companies. While insurers contend the practice has become riddled with fraud and litigation, plaintiffs’ attorneys and other groups say AOB helps make sure claims are properly paid. 

The new law makes changes such as placing limits on attorney fees in AOB lawsuits. 

“From a statewide perspective, the rates that were approved earlier this week reflect what we consider to be critical changes that the legislature put in place earlier this year to help us address the problem of unnecessary litigation and assignment of benefit abuse. In other parts of the state those changes will not result necessarily in rate decreases, but they may result in the estimated increase being less than what we would have planned originally,” said Peltier. “Down the road, people outside of South Florida will see the benefits of this legislation. It may not be this year, but it may be sooner than what they would have otherwise.”

Along with the AOB changes, the new Citizens rates also reflect the Office of Insurance Regulation freezing rates in Monroe County for many wind and multi-peril residential policies.

Photo used under Creative Commons license.

Brendan Rivers can be reached at brivers@wjct.org, 904-358-6396 or on Twitter at @BrendanRivers.