IIf the State Insurance Regulatory Authority (OIR) accepts recommendations from the Citizens Insurance Agency, Keys will increase wind insurance premiums for private customers by 8.2%. Condominium homeowners will raise their prices 9.4%. (These are average rates as the risk of each house is calculated individually.)
If the OIR accepts the recommendations, residential policyholders in Monroe County will see the highest rate hike in the state – 7,219 policies will be more expensive while only 162 policies will be cheaper. The next major interest rate increases concern the districts of Santa Rosa and Okaloosa with a percentage change of 7.9%. The average award price for Monroe County residents, assuming it would be $ 3,842 – about $ 400 higher than this year.
And that’s the good news.
Recently, there has been pressure on citizens to ensure that their policies match the prices charged by private insurance companies. That was the intention to found the state, quasi-public insurance company – an insurer of last resort for markets like the Keys, in which private insurers are reluctant to do business. Recently, however, citizen quotas have been well below the private market due to a federal 10% cap on annual premium increases, making citizens an attractive alternative for homeowners, condominium owners, and commercial property owners. While Florida citizens had 400,000 policies a few years ago, there are nearly 600,000 today.
The citizens’ insurance authority and the OIR are therefore under pressure to abandon the upper limit of 10% for the sliding path of insurance premiums and to adopt actuarially sound prices. This requires a nationwide increase in personal guidelines by 25.9% and commercial guidelines by a whopping 84.3%. The board voted 7-2 in favor of recommending new policyholders pay actuarially sound rates rather than benefit from the same limited premiums that existing policyholders receive from citizens. If approved by the OIR, the recommendation would increase new business rates by an average of 21%.
“We kept rates for Monroe County for a year or more and more,” said Bette Brown, the only citizen insurance committee member who lives in the Keys. Brown made a strong suggestion to the board that the keys should be exempted if lawmakers lifted the 10% cap on insurance premium increases in one year. The Citizens’ Board voted 6-3 to keep Monroe County’s new business caps at 10% above the rate applied to policyholder renewal.
The OIR will make the final decision on the rate, which will go into effect on August 1, 2021.
“Monroe County is so unique, and things that happen here become big problems like affordable housing in the rest of the state. It starts in the keys because we are a microcosm, ”said Brown.
The latest Citizens ‘Report to the State revealed another startling figure: Citizens’ largest operating costs – around 52% – are spent on litigation and non-weather water claims costs in benefit allocation cases. Then a lawyer persuades a homeowner to allow the company to sue an insurance company for water leaks not caused by hurricanes.
“This type of case popped up three or four years ago, mostly in Miami-Dade County,” Brown said, adding that this type of case has not increased in the Keys. “The lawyers are suing insurance companies to make these corrections. Some are fraudulent and some are not, but the lawyers make money from it. “
Brown said she was proud that citizens brought charges to identify these allegations and reduce the frequency of lawsuits.
“It’s getting slower now,” she said.