TALLAHASSEE, Fla. — With 1.2 million policyholders, Citizens Property Insurance, Florida’s insurer of last resort, has seen a big influx in customers in the past two years. Due to this increase, the state-backed Citizens Property Insurance Corp. approved a proposal that would raise average rates by 14.2 percent in 2023, as they seek to push policies into the private insurance market.
The proposal would need approval from the Office of Insurance Regulation before it could take effect and would lead to increases that would vary by type of policy. For example, Citizens wants to raise rates on primary-residence multi-peril policies — the most-common type of homeowners’ coverage — by 12 percent, effective Nov. 1, 2023.
President and CEO Tim Cerio said Citizens’ rates are “artificially low” when compared to the private market. He said Citizens, which has seen massive growth during the past two years, needs to return to a smaller role in the market.
“It has become the primary insurer in a lot of places,” said Josh Palmer, president of Palmer Insurance Agency. According to Palmer, this is because Florida’s insurance market has been so volatile that the majority of consumers cannot find private coverage.
Part of the focus on trying to move policies into the private market stems from financial risks. If, for example, Citizens would not have enough money to pay claims after a major hurricane, it could lead to policyholders throughout the state facing what are known as “assessments” on their policies. “The larger we grow, the greater our exposure, and the greater our exposure, the greater the potential financial burden on the taxpayers of Florida, people who aren’t even Citizens customers,” Cerio said.
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