Florida regulators have approved new rates for the state’s Citizens Property Insurance Corp., with premiums for the most-common type of homeowners policy increasing by a statewide average of 6.6%.
The Florida Office of Insurance Regulation trimmed proposed rate increases that Citizens submitted last year. Also, Gov. Ron DeSantis said Wednesday that many Citizens customers in Miami-Dade and Broward counties will see decreases.
A 17-page order posted Thursday on the Office of Insurance Regulation website did not detail how rates will change by county. But overall, average rates will increase, with the changes taking effect June 1.
Citizens sells various types of policies, but the most common is known as homeowners multi-peril coverage. Citizens last year proposed a statewide average increase of 13.5% for such coverage, but the Office of Insurance Regulation approved a 6.6% increase.
Across a range of types of “personal residential” policies, which also include such things as coverage for mobile homes and condominium units, rates will increase by an average of 8% for primary residences and 17% for non-primary residences. Combining primary and non-primary residences, the statewide average increase will be 8.6%, according to the order.
Citizens, which was created as an insurer of last resort, grew to become the state’s largest insurer in recent years because of problems in the private market. It had 941,158 policies as of last week.
State law limits annual increases for Citizens’ customers. For 2025, the law would allow a maximum 14% increase for owner-occupied primary residences, while it would allow increases as high as 50% for non-primary residences.
Citizens officials have long argued that the state insurer needs higher rates because it often charges less than private carriers. The state has worked to shift policies from Citizens into the private market, and officials say lower Citizens rates serve as a disincentive for policyholders to move.
Supporters of moving policies out of Citizens point to financial risks if the state gets hit by a major hurricane or multiple hurricanes. But homeowners in some areas contend they have few other options for coverage, and insurance rates have become a political lightning-rod issue.
Tim Cerio, president and CEO of Citizens, told the House Insurance & Banking Subcommittee this week that, for the most part, Citizens charges below-market rates because of the longstanding state law that has limited increases.
“Insurance companies must charge an actuarially sound rate. We’re not doing that,” Cerio said. “We’re below that. So our customers, not everybody, but most of them around the state, are getting, it’s fair to say, subsidized insurance not based on any economic need.”
The order released Thursday said regulators must set rates for Citizens that are actuarially sound and “non-competitive.” But it said rate decreases are justified in some areas.
“Based on the review by the office, it is noted that for each of the policy types offered by Citizens, several territories reflect an actuarial indicated rate decrease and if implemented to be non-competitive, most policyholders in these territories would receive an increase at the 14 percent cap,” the order said.
To strike a balance, it said allowing rate decreases of as much as 10% “will provide lower premiums to some of the policyholders in the indicated territories while complying with the statutory requirements of actuarial sound rate and non-competitiveness.”
During an appearance Wednesday in Miami, DeSantis said 73% of Citizens customers with homeowners policies in Miami-Dade County will receive premium reductions. He said the average decrease will be 6.3%. Meanwhile, he said 52% of Citizens customers with homeowners policies in Broward County will get decreases. He said the average will be 4.5%.
