TALLAHASSEE, Fla. — Policyholders of Citizens Property Insurance kept a close eye on a Thursday afternoon hearing in Tallahassee.
The Florida Office of Insurance Regulation listened to the company's CEO and chief actuary as they laid out why they are proposing nearly an 11% increase for policyholders of the company.
The company's leaders painted a picture of growing underwriting losses in the millions of dollars each of the last few years.
President and CEO Barry Gilway said Citizens Property Insurance, which is a nonprofit, had $166 million in underwriting losses last year.
There has been a massive increase in Citizens Property policies recently with private insurers dropping customers and raising rates.
The insurance corporation pointed out that in the last 24 months that five private insurances companies have been declared insolvent, compounding the problem.
Citizens Property Insurance is widely known as an insurer of last resort.
Amid the growing problems of solvency, Gilway said the company is averaging about 5,500 new customers each week.
The company is expected to take on a million policies by the end of this year after only having about 400,000 a few years ago.
Another major part of the problem is the impact that roof claim litigation has on all insurance companies.
Since 2013, the number of lawsuits in the state has increased more than 200 percent.
Although Miami-Dade, Broward and Palm Beach counties now make up less of the overall percentage of lawsuits filed in the state, litigation is still increasing in South Florida.
Comparing 2013 to 2021, Miami-Dade County went from nearly 10,759 lawsuits to almost 19,953.
Nearly 4,383 lawsuits in Broward County increased to 19,444 lawsuits.
Just over 2,000 lawsuits in Palm Beach County in 2013 increased to 7,566 in 2021.
Citizens Insurance claimed Thursday that its rate hike will still, on average, keep premium hikes lower than competitors, which are increasing rates anywhere from 12% to 65%.
Still, many policyholders who are being dropped by their insurance company said they were paying significantly less than what citizens are quoting them at and now have to take less coverage.
"The problem is out there, people that are having to go to Citizens are coming off maybe a standard admitted carrier, which was a lower premium and now they are being forced into the Citizens marketplace because there is no availability and they are getting hit with a higher premium and then now this proposal today will take the premiums even higher for August renewals," said Robert Norberg, the president of Arden Insurance.
The proposed rate change is 10.6% but representatives with Citizens Insurance said Thursday the indication of where the rate hike should be is 36.5%.
If approved, the measure will go into effect in August.
No decision will be made regarding the rate increase until another few weeks.
Homeowners insurance rates in Florida are currently nearly double the national average.
Any comments or concerns not addressed at the public hearing may be emailed to ratehearings@floir.com with the subject line "Citizens Property Insurance Corporation."
The record will be open for public comments until April 14 at 5 p.m.