Millions of Florida homeowners could pay more for property insurance

Millions of Florida homeowners could pay more for property insurance

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By Giselle Balido

June 20, 2024

The proposed increase for Citizens Property Insurance policy holders could result in an average 14% hike across the board for policies covering renters, mobile homes, condos, and single-family homes. 

More than 1 million Florida homeowners could see higher property insurance rates next year after the Citizens Property Insurance Corporation’s Board of Governors unanimously approved a new rate package for 2025. 

The increase that was passed Wednesday could result in an average 14% hike across the board for policies covering renters, mobile homes, condos, and single-family homes. The reason for the hike, Citizens explains, is that the company is required by law to charge rates that will allow them to pay homeowners’ claims in the event of a disaster. 

Florida property insurance rates are already the highest in the nation, with homeowners paying an average annual rate of $10,996 in 2023, which is more than four times the national average of $2,377.

The next step for Citizens is to send the hike recommendation to the state for review. If approved by regulators, the proposed rate increase would take effect on January 1, 2025.

According to Orlando Democratic Rep. Tom Keen (D-Lake Nona), property owners would not be the only ones affected by the proposed rate hikes.

“I would like to let your audience know that even if they rent, they are also paying those high property insurance rates,” Keen told Floricua. “They’re just paying it via the landlord, as opposed to directly to an insurance company. So, it’s reflective of high rents. Housing affordability is linked directly to those high insurance rates.”

 

Insurer of last resort

The Sunshine State has the highest risk for catastrophic property damage from storms due to its coastline, which puts it at risk for hurricane damage, wind damage, and flooding. The growing cost of claims has resulted in a number of insurance companies fleeing the state, a move that affects thousands of homeowners across Florida. 

As a result, Citizens Insurance – which was meant to be a last-resort insurance option – has become the largest insurance company in Florida, serving over 1.2 million customers. The Insurance Information Institute, however, warns that to operate safely, the company should only serve 400,000 to 500,000 customers.

 

RELATED: Florida’s home insurance crisis in a nutshell

 

In addition to the damage caused by hurricanes, others blame Gov. Ron DeSantis for the state’s property insurance woes. Under the Republican’s watch, home insurance premiums have risen dramatically, escalating after a special legislative session in May 2022, when Republican lawmakers approved a $2 billion reinsurance reserve which protects insurers from bankruptcy in the event of a cataclysmic event. Despite the promise that this move would provide economic relief for consumers, costs for policyholders have risen and rate increases have outpaced any savings derived from the fund.

In a report published last year, titled How Ron DeSantis sold out Florida Homeowners, a group of nonprofits pointed out that the insurance industry has been a major contributor to DeSantis over the years, to the tune of more than $9 million.

Relief for consumers?

There is, however, a glimmer of hope for relief on the horizon after the Florida Office of Insurance Regulation (OIR) recently announced that eight property and casualty insurers are coming to Florida.

“We hope to see that in the coming years, Citizens’ policy rates will come down, as private companies return,” said Citizens’ Michael Peltier.

RELATED: Florida home insurance premiums are devastating residents

Author

  • Giselle Balido

    Giselle is Floricua's political correspondent. She writes about the economy, environmental and social justice, and all things Latino. A published author, Giselle was born in Havana and grew up in New Jersey and Miami. She is passionate about equality, books, and cats.

CATEGORIES: HOUSING
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