PALM BEACH COUNTY, Fla. — It’s been known as the last resort property insurer for Floridians.
But lately, Citizens Property Insurance Corporation may be the only option for insurance in some zip codes, and their rate increases started Thursday.
Florida homeowners insured by Citizens Property Insurance are facing an average rate hike of 6.4%, which is now in effect for thousands of homeowners.
The increase comes as the state-run insurer proposed rate hikes over the next several years.
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Citizens Property Insurance Corporation has now topped 1 million policies in Florida. In the last year, it’s been writing an average of 32,000 new policies a month.
The company urged the Office of Insurance Regulation to approve rate hikes in order to strengthen its financial position.
When it’s time to renew, policyholders will see an increase and new policyholders will face higher rates. The rates increased from 6.4% to 10.7%, depending on the time of coverage.
Homeowners like Lee Berger in Delray Beach said with no one else is offering coverage in her area, and she’s left with no choices.
“From what I’m understanding, in this zip code, no one else is writing, even with a new roof,” Berger said. “So, you’re at the liberty at whatever Citizens wants to charge you.”
Sha’Ron James — an attorney with Gunster Law Firm in Tallahassee and a former Florida insurance advocate — said another decision now on the table for insurance regulators is whether to lift the $700,000 cap on policies.
This becoming a greater challenge for new homeowners in Palm Beach County since the median sale price for a house is now $600,000
“Because of the rise in home values, which on one hand may seem to be a good thing it’s increasing, it’s adding to the issues that we’re seeing in the insurance market,” James said.
James said many homeowners who can afford it are choosing to be self-insured. However, Berger said that’s not an option for the majority. She’s shelling out the cash to get a new roof and sticking with her Citizens Insurance policy.
“I couldn’t sleep at night,” Berger said. “I have to have insurance. I worked too hard for everything that I have here.”
Citizens Insurance was also approved to continue increasing rates by 1% annually until it reaches the cap at 15% in 2026.