by: Evan Donovan Posted: Dec 16, 2021 / 07:29 PM EST / Updated: Dec 17, 2021 / 07:44 AM EST
TAMPA, Fla. (WFLA) — Citizens Insurance, Florida’s non-profit homeowner’s insurance company, is seeking an 11 percent rate increase next year.
The ‘insurer of last resort’ is becoming many homeowners’ first choice in Florida, as rates for private insurance skyrocket.
“To say the least, disturbing is an obvious understatement,” said Barry Gilway, CEO of Citizens, during a presentation to its Board of Governors on Thursday in Tampa.
Gilway told the board that private companies are writing fewer policies now than in years past.
“It’s just basic business,” Gilway said. “When companies are more profitable, they want to write more business. They wanna build more homes, buy more things, write more business. When they’re unprofitable, they want to write less business. And that’s what’s happening.”
Fewer competitors typically means higher prices for consumers.
“Many companies are not renewing business that would have been considered highly profitable just a year, year and a half ago,” Gilway said. “We are seeing business come through the door — homes that are 9, 10, 11 years old. Fully insured. And roofs that are 10 years old,” Gilway said.
That trend has sent Florida homeowners running to Citizens. The company now has 747,654 policies, a 40 percent increase over 2020, which was already 20 percent higher than 2019.
Part of the reason so many Floridians are running to Citizens is that they are often the only affordable choice — rather than a last resort when homeowners can’t find other companies who will cover them.
“The recent competitive analysis just completed in November shows that the average premium for 97 percent of our competitors was at least 15 percent or greater than Citizens, compared to 69 percent last year,” Gilway said. “What we’re really saying here is that 97 percent of our competitors, they’re not even within 15 percent of our rate.”
Citizens’ rate increases were capped at 10 percent a year until new legislation passed earlier this year increasing the caps by 1 percent a year, maxing out at 15 percent in 2026.
A spokesperson for Citizens pointed to incentives within Florida law that help cover attorneys fees when homeowners bring lawsuits as part of the reason why insurance is so expensive.
Florida has about 8 percent of the homeowner’s insurance policies in the country, according to Citizens, but makes up 76 percent of lawsuits related to homeowners insurance. Claims that are litigated in court cost four times more, according to the spokesperson.