Citizens Property Insurance board approves 14% rate hike proposal
The proposal will now go before the Florida Office of Insurance Regulation for possible amendment and approval.
Citizens Property Insurance’s Board of Governors approved a proposal last week that will allow the Florida insurer to hike rates by an average of 14% across all personal lines effective January 1, 2025. Under the proposal, homeowner multi-peril policy rates will increase an average of 13.5%, and condominium owners will see an average increase of 14.2%.
Now that the proposal has been approved by Citizens’ board, it will move to the Florida Office of Insurance Regulation (OIR), where a public hearing will be held before the OIR determines whether there are any amendments needed before setting Citizens’ new rates for 2025. Florida state law caps individual rate increases for primary residences at 14%, with non-primary residence increases capped at 50%.
These increases also include the impact of the Florida Hurricane Catastrophe Fund (FHCF) build-up premium. The FHCF is a state trust fund that provides reimbursement to residential property insurance companies to recoup a portion of their hurricane losses in the state.
Participation in this fund is mandatory for all residential property insurers in Florida, with the fund acting similarly to private reinsurance, but at lower market prices. The fund is intended to be self-supporting, with funding coming from a combination of premiums paid by insurers, investment income and, in some instances, revenue bonds.
Citizens is Florida’s largest property insurer, with over 1.2 million policies in force as of June 21. The majority of these policies (around 1.09 million) are personal residential multi-peril policies.