With thousands of new policies a week pouring into Citizens Property Insurance Corp., the state-backed insurer’s board on Wednesday approved seeking 11 percent across-the-board rate increases next year.
The Citizens Board of Governors tossed aside a staff recommendation that, in part, called for increasing homeowners’ rates by an average of 7.3 percent in 2022, with the hikes varying based on factors such as location.
The 11 percent increase would need approval from the state Office of Insurance Regulation and would take effect for policies that start to renew in August. Also, under the board’s decision, an across-the-board hike of 12 percent would take effect for policies that renew in 2023.
“Why don’t we go for the 11 percent and call it a day?” board Chairman Carlos Beruff said after Citizens Chief Actuary Brian Donovan raised it as an option.
The decision, which came after little board discussion and no public input during a meeting in Tampa, would involve Citizens raising rates by the maximum amounts allowed by a new state law.
In the past, Citizens was prevented from passing along increases of more than 10 percent a year to individual policyholders --- a concept that has become known as a rate “glide path.”
The new law (SB 76) gradually increases that cap to 11 percent in 2022, 12 percent in 2023 and ultimately to 15 percent in 2026.
Citizens, which was created as an insurer of last resort, has seen massive growth during the past two years as financially struggling private insurers have dropped policies and sought large rate increases from regulators.