Citizens Insurance rates likely to increase for customers within the coming years

TALLAHASSEE, Fla. - Got a crack in your home's foundation from a suspected sinkhole? Citizens Insurance says it wants a ten percent deductible for sinkhole claims.

Sam Miller from the Florida Insurance Council says Citizens' rates are a problem.

“If you are in South Florida and you can get Citizens' coverage for 30 to 40 percent less than the private market, you’re going to do that,” said Miller.

By law, Citizens' rates are only allowed to go up by ten percent a year. But the company says it would like a 25 percent cap. Insurance expert Don Brown says even private companies are already subsidizing Citizens' low rates.

“The emphasis should always be to get those people into the market where they are paying the full rate and not counting on their neighbors to pay part of the tab for them,” he said.

Brown is an insurance agent and former member of the legislature.

All of the changes that are being talked about for Citizens have one thing in common; They’re going to cost Citizens customers more money. But there is opposition. State Senator Mike Fasano says the sinkhole deductible could be okay.

“You know, allow people to make that decision. Allow homeowners to make the decision whether they want to have a ten percent deductible, but also let it be reflected in their premium,” said Fasano.

The good news for Citizens customers? The 2012 election. Few policy makers have a stomach for huge increases, but a failure to act will continue to shift costs to everyone else.

Recognizing the potential difficulty in getting the legislature to do anything in an election year, Governor Rick Scott is asking Citizens to come back with recommendations it can accomplish without legislative approval. Those could include higher deductibles and higher rates for very large condo associations.