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Citizens Property Insurance Corp. approves significant rate hikes for South Florida homeowners

Citizens Property Insurance Corp. approves a 14% rate hike, affecting homeowners in South Florida. Learn how these changes will impact your insurance costs.

South Florida residents are bracing for a significant rise in their insurance premiums as Citizens Property Insurance Corp. approves a steep 14% rate hike for 2025. This decision, made by the company's Board of Governors, comes despite actuarial estimates suggesting much lower increases. The rate hike aims to make Citizens less competitive with private insurers, ultimately reducing its policyholder count from the current 1.2 million.

Why South Florida faces higher insurance hikes

Citizens Property Insurance Corp. has decided to implement the maximum rate increase allowed by state law, aiming for a 14% hike across various personal lines of business. This decision was made during a brief hearing that lasted less than 30 minutes. The rate hikes will affect single-family homes, private condominium units, mobile homes, and rental properties, including both multi-peril policies with wind coverage and wind-only coverage.

For single-family homeowners in South Florida, the rate hikes could have been significantly lower if the company had relied on actuarial indicated rates. These rates, which are designed to cover expected losses, suggested much smaller increases for the tri-county region. In Broward County, the indicated actuarial rate hike for multi-peril home policies was just 0.8%. In Palm Beach County, the suggested increase was 9.8%, while Miami-Dade County's indicated rates actually called for a 4% decrease.

Despite these figures, Citizens' actuaries applied an analysis designed to ensure the company's rates remain "competitive" with private market insurers. This approach is part of a broader strategy to reduce the number of policyholders and prevent Citizens from becoming too dominant in the market. Under this mandate, the rates needed to be higher to make Citizens less attractive compared to private insurers.

A businessman pointing at a graph chart with an arrow, indicating financial growth.

Impact and reactions to the rate hike

The decision to approve a 14% rate hike has sparked various reactions, particularly among homeowners who are already struggling with rising living costs. Luz Green, a student at Florida Atlantic University, expressed her frustration in response to a news report outlining the proposed increases. She highlighted the challenge of affording higher premiums without a corresponding increase in income, noting that the rate hike offers no additional coverage or benefits.

During the Board of Governors meeting, no members argued for a lower increase, though several praised the improved financial results brought about by legislative reforms. These reforms have made it more difficult for homeowners to sue insurers over denied or undervalued claims, leading to a sharp decline in litigation. This decrease in lawsuits has improved Citizens' financial health, with the company posting a $746.5 million net profit last year after significant losses the previous year.

Despite these positive financial indicators, the company's actuaries justified the flat 14% hike by comparing Citizens' rates to those of private market insurers. The analysis concluded that Citizens' rates, even with the increase, remain competitive.

Governor Ron DeSantis also weighed in, noting that some Citizens policyholders have found lower rates with private insurers. The rapid growth of Citizens over the past five years—from 420,000 policies in 2019 to 1.2 million today—has raised concerns about the potential for assessments and surcharges on all Florida insurance customers if the company cannot cover claims after a major catastrophe.

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