Florida's Biggest Insurer Says It Needs to Increase Rates by 93 Percent
Citizens Property Insurance Corp. proposes a 13.5% rate increase, citing a necessary 93% hike for competitiveness. Florida homeowners face the highest insurance rates in the U.S., averaging $10,996.
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Florida's largest insurer, Citizens Property Insurance Corp., has requested a 13.5 percent rate increase but claims that a nearly 93 percent hike is necessary to remain competitive in the market. The proposed increase would raise the average cost of homeowners multi-peril policies from $3,560 to $4,041. Citizens' chief actuary, Brian Donovan, indicated that the current rates are actuarially unsound and not competitive with the private market. Citizens, established as a state-backed insurer of last resort, aims to reduce its financial risks associated with hurricanes. Critics argue that many Floridians already face high insurance costs, with the state having the highest home insurance rates in the U.S. In 2023, Florida homeowners paid an average annual premium of $10,996, significantly higher than the national average of $2,377. The state has also seen substantial increases in home insurance premiums and a high number of insurers transferring risk to reinsurance companies. A decision on the proposed rate hike is expected by August 26.
- Citizens Property Insurance Corp. seeks a 13.5% rate increase but claims a 93% increase is needed for competitiveness.
- The average cost of homeowners multi-peril policies would rise from $3,560 to $4,041.
- Florida has the highest home insurance rates in the U.S., with an average premium of $10,996 in 2023.
- The state has experienced significant increases in home insurance premiums and risk transfers to reinsurance companies.
- A decision on the rate hike proposal is anticipated by August 26.
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6 commentsI'm not gloating though. I think what's happening to Florida right now (sea level changes, hurricanes, uninsurability) is what will happen to for example Amsterdam in a few decades. Flood risks are mostly uninsured in the Netherlands, while hurricane risks seem insured in Florida. I don't see house prices correcting for flood risks in Amsterdam, even though the risk of going under seems well inside the time boundary of current sales / mortgages. People are myopic and seem to expect states to handle all adverse effects of risk, both in the Florida case ("Florida residents already pay too much for insurance"), and in the Dutch case (no insurance, but we'll get bailed-out, right?).
[1] https://en.wikipedia.org/wiki/Citizens_Property_Insurance_Co...
What Citizens did (and maybe still does; it's been about 20-some years), is "tax" the private insurance companies to help pay their deficit bill. Of course, the private insurance companies are legally compelled to pay, but they pass it onto those of us who were insured privately.
So, FL government may have paid as well--I don't know. All I know is we (the privately insured citizens certainly did).
The main issue at this point is wealthy people/PE buying up all the homes self insuring.
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