TALLAHASSEE, Fla. - Insurance rates would jump an average of 30 percent for new customers under a plan being considered by the state-operated Citizens Property Insurance Corporation.
Currently, state law limits Citizens' rate increases to 10 percent a year, but the company thinks the law does not apply to new customers.
The law clearly bans rate increases of more than 10 percent for existing customers, but the company's attorneys say it does not mention any rules for new customers.
Citizens Property Insurance wants to reduce its number of policies and exposure because it has become Florida's largest property insurer with about 1.5 million policies.
Spokeswoman Christine Ashburn says raising rates for new customers would help ensure the company is charging the right rate for the right risk. "If our rates are higher for new business, we will write less coverage. Most people will find other options and that is a true benefit to a proposal like this is to ensure that consumers are looking at all of their options and only choosing Citizens as an insurer of last resort."
Ashburn says the rate proposal would increase premiums for new customers between 20 and 90 percent depending on the area and the line of business. The average statewide increase would be 30 percent.
A Citizens committee will review the plan on Thursday but will not take any action. Ashburn says the full board will consider the proposal at its June or July meeting.