State insurance regulators consider Citizens Property Insurance rate increase

7:10 PM, Aug 20, 2013   |    comments
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The current proposed rate increase breaks down like this: the statewide average increase for the standard homeowner policy is 6.6%; in Hillsborough the increase ranges from 2% to 10.7%; Pinellas 6.4% to 10.7%; and Pasco 7.2% to 10.7%.
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St. Pete Beach, Florida -- Midway through the hurricane season and Citizens is stirring a storm of its own, proposing to raise rates once again.

However before a decision is made, the Florida Office of Insurance Regulation will hear from the public and Citizens Insurance on the rate hike that would be the fourth increase in four years.

"We're still trying to get back to rates that match the risks we face," says Michael Peltier, spokesperson for Citizens Property Insurance.

Peltier says Citizens' rates for storm coverage have jumped about 30 percent since 2010. The current proposed rate increase breaks down like this: the statewide average increase for the standard homeowner policy is 6.6%; in Hillsborough the increase ranges from 2% to 10.7%; Pinellas 6.4% to 10.7%; and Pasco 7.2% to 10.7%. 

Citizen officials say the rate depends on risk.

While the state cap is 10%, Pelier says that does not apply to losses. Citizens says it's still trying to recoup pay outs from the 2004-2005 seasons.

"One of our goals, if possible, is to make Citizens the insurance of last resort. In our original role, we've grown to 1.2 million," Peltier says.

Before the hearing Tuesday, Citizens' staff had a one-on-one meeting with policyholders at the Tampa Bay Beaches Chamber of Commerce.

Gregg Nicklaus says he came looking for clarity on the rate increases. Nicklaus' family owns commercial property and several homes along Pinellas beaches. His parents own a home on St. Pete Beach as a rental and are on a fixed income.

Each year, Nicklaus' parents adds Citizens' rate hike on to the tenant's rent but he worries renters will be priced out. 

"There are individuals out here who will not pay that rental, and the alternative is to sell -- typically at a discount," Nicklaus says.

Gregg says Citizens' push to move policyholders into the private sector is premature.

"I'm not sure there will be a place to go that isn't cost prohibited," he says.

Citizens is also proposing a 20% increase on sinkhole coverage for sinkhole insurance in Pasco and Hernando ,and a 50% increase in Hillsborough. There is no cap on rate increases for sinkholes.

The Office of Insurance Regulation will decide on the rate increase in phases during the next few weeks.

Follow 10 News Reporter Isabel Mascarenas on twitter @IzzyMascarenas

Isabel Mascarenas

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