Florida’s government-backed home insurers plan to raise premiums by 14 percent, another blow to more than 1 million hurricane-ravaged state residents who already have some of the highest insurance rates in the country.
The state’s People’s Property Insurance Corp. board of directors voted unanimously Wednesday to raise premium rates for next year, even though nine private insurers in the state have filed for rate cuts and 10 others have said they intend to keep their 2025 rates unchanged.
The rate increases are pending approval from state regulators.
“You have to pay for paradise. I’m all for it. You have to pay a little more, but how much? It’s too expensive. It’s too expensive,” said Sophia Bereza, who lives in the Tampa area. He spoke to WFTS-TV on Wednesday.
Belleza said she looked into Citizens insurance, but no matter which company offered home insurance, the prices were too high.
A combination of more intense storms and hurricanes, along with soaring inflation, is causing insurance costs to skyrocket.
“I know it’s unfortunate, but I understand inflation is causing a lot of problems. Plus the weather isn’t what it used to be, and we get a lot of unexpected storms,” Tampa-area resident Frances Druding told WFTS-TV.
Primary homeowners would have to pay 14% more, while owners of secondary homes (defined as homes occupied nine months or less per year) would have to pay 50% more.
While the 14% increase is substantial, Citizens’ premiums are still expected to be significantly lower than those offered by other insurers.
Miami-Dade County homeowners with Municipal Insurance, which covers fire, theft and windstorm, will see their average premium increase from $5,113 to $5,804. According to data compiled by the Miami Herald.
Broward County residents with Citizens would see their average premiums increase from $5,385 to $6,112.
In less expensive parts of the state, such as Hillsborough County, which surrounds Tampa Bay, average premiums would rise from $2,667 to $3,028.
In neighboring Pinellas County, which includes Clearwater and St. Petersburg, average premiums would rise from $2,854 to $3,234.
Citizens, the state’s largest insurer, was created by the Florida Legislature in 2002 as a last resort for residents who couldn’t find insurance on the open market.
Citizens’ current board is made up of lawyers and business executives appointed by Florida’s Republican governor, Ron DeSantis, and the Republican-led state Legislature.
By law, citizens are limited in how much they can pay in insurance premiums, but in recent years lawmakers have voted to raise the caps.
In 2022, the Florida Legislature mandated that Citizens policyholders purchase flood insurance by March 2027.
Citizens policyholders with homes valued at $500,000 or more have until March 1 of next year to purchase flood insurance.
Florida has seen its population explode in recent years as residents flock to the state from Democratic states such as New York and California for its low taxes and business-friendly environment, but its home insurance market is unstable.
According to an analysis by S&P Global Market Intelligence in March, Florida insurers posted profits last year for the first time in seven years.
The group of about 50 insurers posted net losses of more than $1 billion in each of the past two years, compared with a net profit of $147.3 million in 2023, according to the analysis.
Underwriting losses for the insurer group as a whole still amounted to $190.8 million, but that was significantly lower than the roughly $1.8 billion in 2022 and $1.52 billion in 2021, according to S&P Global Market Intelligence.
Devastating storms, such as Hurricane Andrew in 1992, and subsequent weather events have bankrupted some insurance companies in the state and caused others to abandon business in the state.
Last year, Farmers Insurance announced it would stop offering new coverage for auto, home and comprehensive policies in Florida, and AAA said it had decided not to renew a “small percentage” of its home and auto policies.
Since 2021, nine insurance companies in Florida have declared bankruptcy or merged with other companies.
Average annual property insurance premiums in Florida last year rose 42 percent to $6,000, compared with the national average of $1,700.
Gov. DeSantis and the state Legislature have been working on the issue, including calling special sessions in 2021 and 2022, but most of the focus has been on protecting insurers from lawsuits and setting aside funds for reinsurance to protect insurers.
Insurers are optimistic that the changes will reduce expenses, particularly claims litigation costs.
Additionally, Florida regulators this year approved six property-casualty insurers to begin writing residential property insurance, S&P Global Market Intelligence said.
With post wire
