MoneyReal Estate News

Actions

Can lawmakers fix Florida's home insurance crisis?

Citizens Property Insurance Corporation's policies increase by 48% this year
Posted at 7:32 PM, Dec 08, 2022
and last updated 2022-12-08 19:40:14-05

WEST PALM BEACH, Fla. — All eyes are on next week's special session in Tallahassee where lawmakers will look to alleviate Florida's home insurance crisis.

Everyone from policyholders to private insurance companies are hoping legislators can come up with something that will stabilize the market.

The state's insurer of last resort, Citizens Property Insurance Corporation, held 760,000 policies in January. By December, the insurer was at 1.13 million policies, which is about a 48% increase.

Michael Peltier outlines why Citizens Property Insurance Corporation has seen a massive rise in clients this year.
Michael Peltier outlines why Citizens Property Insurance Corporation has seen a massive rise in clients this year.

Michael Peltier, a spokesman for Citizens Insurance, said there are multiple reasons for the growth.

"Private companies are either not writing policies anymore, they're restricting their policies or they're limiting where they write policies across the state," Peltier said. "So, most of those policyholders are coming to Citizens."

According to the Insurance Information Institute, Citizens is extremely rate capped. The cap doesn't help the insurer fix the problem.

Mark Friedlander discusses the problems the state faces amid the home insurance crisis.
Mark Friedlander discusses the problems the state faces amid the home insurance crisis.

"They have a maximum level of increase at 11% and were only allowed a 6.4% increase to be implemented this year, which is well below market," Mark Friedlander of the Insurance Information Institute said.

Friedlander said the Florida insurance market is seeing an average rate increase across the state, running about 33%.

"They do need to get to a point where they are in a position where they can charge actuarily sound rates so that they are on par with the private market," Friedlander said.

According to the Insurance Information Institute, six private insurance companies have crashed this year with another 24 on a watch list.