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Citizens insurance denied expected rate increases as more companies halt new policies

Most insured by Citizens will see 6% rate increase
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Posted at 6:10 PM, Jun 27, 2022
and last updated 2022-06-28 07:45:32-04

TAMPA, Fla. — Two more Florida property insurers are no longer writing new business for homes in the state. This comes as Citizens Property Insurance Corps. received rate increase approval below the anticipated 11%.

Centauri Insurance and Bankers Insurance both attributed the pause on new policies to higher reinsurance costs this year. They add to the dozens of companies either halting new business in the state or pulling out of the state completely, in addition to the nine now in receivership.

As these companies stop adding new policies or drop customers with older roofs, more homeowners are signing with Citizens, which is supposed to be the state’s insurer of last resort.

Citizens told ABC Action News that they reached 900,000 policies last week. We’ve been following the numbers and found they’ve added nearly 100,000 since January 2022.

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In January, Citizens requested a statewide increase of 11% for policies renewing from August 1, 2022, to December 31, 2022, and 12% for policies renewing after January 1, 2023, to comply with new caps put in place by the Florida Legislature in 2021.

Overall Estimated Statewide Average Rates Changes

“We’ve had a rate cap in place since 2010. Prior to that, our rates were frozen for three years and that obviously put us behind the market then and now we have a rate cap,” explained Citizens Spokesperson Christine Ashburn.

On June 24, the Florida Office of Insurance Regulation released their approved rate changes for 2022, denying their request to increase rates to 11%, homeowners with multi-peril coverage will only see 6.4% rate increases. However, those with mobile homes will see increases closer to 11%.

Eight to ten percent rate increases are on track with the rest of the country, according to the Insurance Information Institute. But in Florida, most private companies are increasing rates by 30-50%.

“Of course, we know so many homeowners are seeing renewal bills at 50%, 75%, 100% or more than what they paid just last year. Pretty rough. This just does not stop and until you stop the flow of these roof schemes, which leads to the litigation,” said Mark Friedlander a spokesman with the Insurance Information Institute.

It continues to upset the balance between us in the private market and make us more and more attractive,” Ashburn explained. “Right now, we're growing because really the market is, in many places, not writing… We're the cheapest 99% of the time.”

Below is the memo Bankers Insurance sent to Florida agents on June 15:

As you are well aware, the last several years have brought unprecedented challenges to the insurance industry. Reinsurance has become more expensive and less available in an already distressed market, forcing carriers to cease writing new business, non-renew policies, or close their doors entirely. Bankers is not immune to these challenges, and as a conservative AM Best rated carrier, we have made the difficult decision to temporarily close new business binding for Personal Lines effective today, at 5:00 pm ET. We remain open for all Commercial Lines, Builders Risk and Flood. Every decision we make is in an effort to remain fiscally responsible to our agents and our policyholders.

We did not make this decision lightly. We understand the impact that this decision may have on our agents, and we appreciate your loyalty to Bankers over the last 46 years. Our financials remain strong, and our reinsurance program remains stable; we must be careful to grow responsibly to maintain our long-term financial strength for years to come.

Your Bankers Sales Team

Below is the memo Centauri sent to agents on June 14:

The last couple of years have been a tumultuous time in the Florida property market. Recently, we’ve witnessed several carriers entering receivership, non-renewing business, and eliminating new business offers. Through this, Centauri has remained dedicated to being fiscally responsible not only for our clients, but also for our agents.

A major component of our carrier financial accountability includes ensuring policy portfolios don’t outpace reinsurance purchases. With the recent announcements impacting the Florida marketplace, we’ve absorbed significantly more new business than anticipated. We wholeheartedly thank you for the overwhelming response in choosing Centauri for your customers. Your loyalty will contribute toward our stability and security as a Florida (and elsewhere) carrier for many years to come.

For Centauri to avoid surpassing reinsurance purchases, we will be implementing a New Business binding moratorium for Personal and Commercial lines policies effective June 15, 2022, for all Florida counties. As a reminder, all pending quotes will need to be bound and issued by 5 PM EST. This is a temporary measure in direct response to a volatile market and targeted at ensuring continued fiscal responsibility to our agent partners and customers.

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