Citizens approves rate hike

Rates average 4.6 percent rise

If not for higher water damage claims in South Florida, Citizens Property Insurance Co. would have been able to reduce property insurance rates for most homeowners here.

But because most water damage claims originate from this region, rates for multi-peril single-family residential coverage are going up for 2016 in Broward, Palm Beach, Miami-Dade and Monroe counties and going down everywhere else in Florida, pending final approval by the state.

Citizens’ Board of Governors voted unanimously Wednesday to approve rec- ommended rate hikes averaging 3.2 percent statewide for all personal property insurance lines. The increase includes 1.1 percent for multi-peril single-family coverage and 8.8 percent for high-risk wind-only coastal policies.

Palm Beach County’s 57,926 personal lines policyholders will see an average rate hike of 4.6 percent. Multi-peril coverage rates for 12,140 single-family homeowners will increase 0.7 percent, while windonly rates for 11,023 residents east of I-95 will increase 9.1 percent.

In Broward County, rates for all 85,160 personal lines policyholders will increase an average of 4.8 percent. Multi-peril coverage rates for 22,242 single-family homeowners will increase

0.7 percent, while wind-only rates for 11,023 residents east of I-95 will increase 9.1 percent.

Overall personal lines rate increases will average 6.2 percent in Miami-Dade and 10.3 percent in Monroe County.

The impact of the water damage claims affects only multi-peril policies and not wind-only coverage.

Imposing rate hikes only in the areas where the claims are occurring is a sound practice for insurers, said John Rollins, Citizens’ chief risk officer. “The frequency and severity of wa--

ter claims really ends up being paid for by policyholders in those areas,” Rollins said.

Efforts to curb what many say is an excessive and possibly fraudulent pattern of water damage claims by restricting homeowners’ ability to sign over insurance benefits to contractors have failed in the legislature and in courts. Rollins told the board it’s up to South Florida residents to deal with the problem.

Water damage claims eat up 33 percent of each premium dollar, according to a Citizens spending analysis. Normally, that percentage should be 26 percent, Rollins said.

In a February report by

Citizens’ chief claims officer Jay Adams, the South Florida metro region accounted for 43 percent of all Citizens policies and 72 percent of water damage claims. Of 513 lawsuits filed about water damage claims in 2014, 71 percent originated from Miami-Dade, 25 percent from Broward and 4 percent from Palm Beach County.

Of all claims in 2014, 65 percent were attributed to “non-weather”-related water damage and 14 percent to weather-related water damage. The rate hike package will be sent to the Office of Insurance Regulation in July for final approval.