It is unclear why the Office of Insurance Regulation has approved a rate hike for Florida homeowners insured with Citizens Property Insurance Corporation. But it is clear that the policy coverage that was once offered by Florida’s insurance company was been eroded. Coverages in each policy issued by Citizens has been lessened in almost every renewal. Sinkhole coverage, carports, water damage, tile damage, and other provisions have been re-written to benefit the carrier. Yet, rates are going to increase.

Citizens can’t blame the increased costs on hurricanes or tropical storms, so it had to come up with something. . . .

Claims. Citizens argues that the number of claims increased and thus premiums must rise. Citizens makes this allegation and spreads it along the news channels in Florida. The result: policyholders who have covered damage think twice about submitting their damages to the insurance carriers. This scare tactic has worked to some extent. No one wants to pay more for insurance and with the rising cost of everything from a gallon of milk to the price of a college tuition, Floridians want to hold on to their hard earned money, but the OIR gave approval for the higher rates Citizen cried wolf to add to its books.

Before the OIR approved the rates, a long hearing was held for Citizens to present its position.

Claims Journal reported on the hearing,

Citizens’ CEO Barry Gilway said water damage claims, which the company described as not flood-related but instead a water loss as a result of a sudden or accidental discharge of water by a pipe or water-system issues, have increased by 50 percent in severity and frequency. ‘We have to respond and have to respond aggressively,’ Gilway said.

Gilway described the rise in water damage in South Florida as ‘very disturbing.’ He said two years ago the frequency of water loss damage was 8 percent and has since risen to 13 percent, with the company now seeing an average of about 1,000 water damage claims a month. The average water damage loss 2.5 years ago was $9,000 and today is closing in $15,000.00.

Citizens must have expected that with writing such limited policies, the claims dollars would decrease and that it would be able to deny more claims, but policyholders are calling on Citizens to honor its contract when damages occur.

Construction age in the homes suffering the water losses is something that has not been reported but should be considered. And before it complained about water losses, Citizens complained about sinkhole claims costs—that was until the industry changed the law and the corporation changed how it handled litigated claims.

The increase amount will depend on your region and the type of policy, and to be fair the OIR did slightly decrease the requested rate hike.

According to WTSP, Citizens has nearly 600,000 customers.

Homeowners with a comprehensive policy with Citizens will see their rates go up by an average of 1.8 percent next February.

Citizens customers, however, who live near the coast and purchase just wind coverage will have an average increase of 8.3 percent. Many of these customers live in Miami-Dade, Broward and Palm Beach counties.”