Key West Citizen

Friday, July 01, 2016

The Florida Keys-based insurance watchdog group FIRM is gearing up for a fight with the insurance company that covers Monroe County, as the company is proposing another significant annual rate increase.

Citizens Property Insurance Corp. is proposing a nearly 9 percent increase for windstorm coverage in Monroe County, bringing the average premium from $3,706 a year to $4,033, according to a proposed rate increase the Citizens board of directors approved last week.

Citizens has significantly increased windstorm rates in the Keys since 2006.

Citizens, the insurer of last resort in the state, will now submit the proposal to the state Office of Insurance Regulation, which will review the proposal and make a decision in August.

Members of FIRM (Fair Insurance Rates in Monroe) have been actively lobbying Citizens about lowering rates and FIRM board Vice President Steve Russ recently traveled to a hearing in Tallahassee to oppose the rate increase, Russ said.

Russ argued that Citizens models do not take in account that Monroe County has some of the strongest building codes in the state and there has not been a significant tropical storm or hurricane to brush the Keys in more than 10 years.

“From the very beginning, the homes in the Keys were built to withstand storms,” Russ said.

FIRM plans to ramp up its efforts this summer to stop the rate increase. FIRM is currently working on a $485,000 study to determine if Citizens’ rates in the Keys are accurate. The FIRM board of directors hope that enough of the study will be complete by August to come up with a “counter proposal” that would call for a smaller increase or no increase at all, said Mel Montagne, FIRM board president.

FIRM has been working on the study, which Citizens agreed to fund, for several years.

Keys property owners have consistently been hit with windstorm rate increases from Citizens since 2006, when FIRM successfully lobbied state officials to deny Citizens request for an increase, which resulted in $75 million in savings to Keys residents since then, according to Montagne.

Last year, state regulators approved an 8.3 percent increase last year, 8.1 percent increase the previous year and a 10.5 percent increase two years ago.

During the roughly 10 year period of time, Citizens earned $585 million in revenue off Keys premiums, Montagne said.

Citizens spokesman Michael Peltier argued the rates are based on actuarially sound models.

“We owe that to all of our customers, not only in the Keys but across the state,” Peltier said. “The increases are warranted. They are not to boost our profit margins.”

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