| BALOW REALTY |
| Real Estate News |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| Check back regularly - We will add/edit articles as they become relevant to the current market trends. |
Citizens Property Insurance board approves rate hike
TALLAHASSEE, Fla. – July 27, 2010 – Citizens Property Insurance’s board
approved an average 8.4 percent statewide rate hike Monday. That includes an
average increase of as much as 11.3 percent in parts of South Florida and a 9.3
percent statewide rate hike for policies that cover homes, condominium units,
renters, mobile homes and vacation or rented property.
Some policyholders’ rates would decrease under the proposal, which still needs
approval from the Office of Insurance Regulation.
A 3.8 percent average decrease is proposed for Miami Beach and a 10 percent
decrease for coastal parts of Broward and Palm Beach counties. Individual
policyholders’ premiums can vary from the average rate change in a
neighborhood.
Four of Citizens’ eight board members approved the proposal. Two board
members were absent and two others -- Tom Lynch of Plastridge Insurance
Agency in Delray Beach and Carol Everhart, vice president of BB&T in Tampa
-- recused themselves because they’re insurance agents and they said voting to
increase rates could potentially benefit them personally.
Citizens officials said that their current overall rates aren’t high enough to
offset costs, including claims payouts that have increased dramatically in recent
years for damage from fires, sinkholes and other issues not related to
hurricanes.
A report prepared by Citizens says insurance rates in some of parts of Broward,
Palm Beach, Miami-Dade and Orange counties should be much higher than
what is proposed -- as much as 193 percent higher -- but a 2009 state law caps
the annual premium increases to 10 percent.
Some of the proposed rate hikes are slightly higher than 10 percent because an
additional charge is allowed for costs related to reinsurance, or back-up
coverage.
The Legislature froze Citizens’ rates from 2007 to 2009. Regulators allowed
rates to rise this year, including an average increase of nearly 12 percent for
homeowners in coastal Broward and Palm Beach counties.
State regulators will hold rate hearings Tuesday for Allstate Insurance Co.’s
Florida subsidiaries and on Aug. 5 for Royal Palm Insurance. The Allstate
Floridian Insurance companies, which changed their names to Castle Key last
year, have about 250,000 policies, making them Florida’s third-largest private
home insurer.
Nearly three-fourths of those policies are with Castle Key Insurance, which
proposed raising rates by a statewide average of 33 percent, and the rest are
with Castle Key Indemnity, which asked for an average 18 percent statewide
rate hike.
Moore said the increases are needed to build the companies’ claims-paying
reserves because premiums aren’t keeping pace with expenses, including
backup coverage costs and claims for fires, theft and storms.
Regulators already approved a 10 percent average statewide rate hike for
Gainesville-based Royal Palm Insurance Co.’s homeowners policies and the
company, the tenth largest private residential insurer, is now requesting a 22
percent average rate hike for policies that covered rented properties or
vacation homes.
Most of Royal Palm’s policies are former Allstate policies. In 2006, less than
two months after Royal Palm started selling insurance, it announced that it was
partnering with Allstate to take over about 120,000 of the Illinois-based
insurance giant’s policies.