SEMINOLE COUNTY, Fla. — A state-managed insurance company many homeowners rely on for cheaper insurance rates is raising its rates beginning Nov. 1 in part due to all those damage claims from storms like Hurricane Ian.
What You Need To Know
- State-backed Citizens Property Insurance is raising rates beginning Nov. 1
- Most homeowners will see an average 6.4% increase, but after state approval, some could see up to an 11% increase
- A state insurance the rate hike is much lower than what those with private insurers are seeing
Citizens Property Insurance Company customers could see up to an 11% increase in rates on new and renewed policies — though homeowners with the most common policy will see an average 6.4% increase.
Despite the state approving a Citizens rate increase, Mark Friedlander, with the Insurance Information Institute, says if Citizens will insure you or renew your policy it will likely still be cheaper than most private insurers.
“You should be very happy to accept that renewal because the rate increase is only going to average 6.4% across the state, said Friedlander. (It is) much lower than the private insurers average of 33%.”
The rate hikes come as thousands of homeowners are turning to the state-backed insurer for coverage.
Friedlander adds even though Citizens Property Insurance is state managed, it may still not insure everyone.
For example, if your home has appraised to higher than $700,000, or if you’ve had repeated claims.
“If you have a home that has significant structural issues, if you have a home where you have filed numerous claims in recent years — you have a claims history that looks negative to insurance companies – they may decide you are too high a risk and they will not write your policy,” said Friedlander.
Friedlander says after Hurricane Ian, it appears Citizens will be able to pay out all of its claims. He says its rate increase will allow the company to stay in good financial standing. And that’s good for all insurance customers — not just Citizens. If it ran out of money to pay its claims, unlike private insurers, those costs would fall on every insurance consumer.
“So what happens if Citizens depletes it’s reserves — every consumer in the state will be paying to replenish that,” said Friedlander.
“That means if you’re a homeowner, a condo owner, a renter or even a driver with auto insurance, you will get multi-year surcharges on your insurance bills to replenish the funds of Citizens.”