Citizens Property Insurance Corporation’s Board of Governors recommended an across-the-board rate increase of up to 12% for 2022 after members expressed concern over Citizens’ continued growth and inability to slow it down.

Board members modified a staff recommendation, changing it to statewide increase of 11% for policies renewing from August 1, 2022, to December 31, 2022, and 12% for policies renewing after January 1, 2023, to comply with new caps put in place by the Florida Legislature earlier this year. The recommendations will be forwarded to the Office of Insurance Regulation, which must approve any rate increase.

The staff recommendations varied by county but were mostly under the 11% recommended by the Board of Governors.  The Board decided to approve the increases allowed by statute rather than to follow staff’s recommendations based on rates that are actuarially sound.  During the 2021 Florida Legislative Session Citizen’s 10% cap was removed and replaced with a 1% annual increase yearly until the cap reaches 15%.

Citizens Chairman Carlos Beruff said the widening premium gap – coupled with high litigation rates – is making it virtually impossible for Citizens to shrink and return to its role as the Florida’s residual insurer. The recommendation to apply the maximum allowable rate increase is necessary to stem the flood of policies to Citizens.

“We need to take a look at all our options to stop this unsustainable trajectory,” Beruff said. “Any solution is going to require legislative action to provide Citizens with the tools and flexibility to return to its role as an insurer of last resort.”

Florida’s property insurance market continues to face challenges. The 52 private companies writing 79% of property insurance policies in Florida lost $847 million through the third quarter of 2021. Meanwhile, Florida leads the nation in litigation. Despite accounting for only 8% of policies in 2019, Florida accounts for 76% of all litigation nationwide.

It is worth noting that none of this troubling litigation stems from Monroe County.

FIRM is working with a lobbyist to return the rate cap to 10% for Monroe County residents for whom Citizens is truly the insurer of last resort.  The final decision on the proposed rate increases will be made by Florida Insurance Commissioner David Altmaier following the Citizens rate hearing.  FIRM will be attending and speaking on behalf of Florida Keys residents.

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