More than 82 percent of the homeowners’ insurance policies written by Citizens Property Insurance Corp. for coastal Manatee County residents are likely to decrease, according to information provided by the state-created alternative insurance company.
Some 121 of the 147 standard policies — all-encompassing insurance held by coastal Manatee County insurance customers that include hurricane (wind) coverage and all other perils, including fire — will likely decrease after the company’s board of governors June 24 approved a 2016 rate package. The rates must be approved in August by the Florida Office of Insurance Regulation.
Coastal customers — including owners of property on Anna Maria Island and on the mainland coast, including Cortez — who paid annual average premiums of $2,921 before the change — will pay $2,772 afterward, an average decrease of 5.1 percent.
Meanwhile, rates for only 13 percent of wind-only homeowners’ policies countywide — 38 of 298 customers — likely will decrease. Policyholders who paid an average of $2,046 before the change will pay $2,229 afterward, an average increase of 8.9 percent.
Overall, the package lowers rates for nearly half of Citizen’s personal-lines policyholders statewide “while responding to increased water-loss claims and continued inadequate rates along the coast,” the company said in a June 22 news release.
Citizens is considered by many as Floridians’ insurer of last resort. Most policyholders purchase standard policies, more so than wind-only, the company said. Standard policies include wind coverage.
Citizens’ rates for 2016 are decreasing less than they did for 2015. But nearly 255,000 customers are expected to see lower rates statewide.
Rates are affected by several factors.
First, there have been fewer catastrophic weather events in the state than in the early to mid-2000s. Citizens also credits what it calls an “unprecedented” depopulation effort, which transferred nearly half of its policyholders to private companies — almost 550,000 of about 1,123,000 customers — since January 2014. Because of the reduction, most of Citizens’ current policies are riskier than in the past.
Statewide, standard coastal policyholders will see average increases of 8.6 percent, while coastal mobile-homeowners and condominium owners will see rates increase by up to 10.2 percent.
Coastal customers whose rates increase can attribute them to the “historical inadequacy” of coastal rates and the higher risks associated with living on a coast, the release said.
The board of governors approved an average increase of 3.2 percent for inland and coastal policies statewide. Much of the increase is fueled by a spike in water-loss claims in Dade and Broward counties and the fact that some coastal policyholders with “nearly adequate” rates switched to private market insurance, Citizens said.
Due to affordable reinsurance — insurance purchased by Citizens from the global market — and policy-reduction efforts by Citizens, for the first time the company can now handle claims from 100-year coastal storms — so-called storms of the century — without having to levy assessments on all policyholders, the company said.
Citizens said if Florida was hit by a 100-year storm, it would pay out $11.2 billion in claims, down from the 100-year storm payout estimate of $24.5 billion in 2011.
