Citizens Property Insurance Corporation was allowed to increase homeowner's insurance rates by an average of 10.8% statewide last month. Citizens sought an 11.8% increase, but was only allowed to increase policies by 10.8%. Homeowners already frustrated by poor claims handling with Citizens will no doubt be even more upset when they get their new insurance bill. A recent Sun Sentinel article detailed the rate hike, and quoted a Citizens official who stated, “the increases will help reduce the financial burden of assessments for all Floridians”. This argument rings particularly hollow, as Citizens currently has $6 billion dollars in reserves due to no large storm striking Florida in years. One defense of the rate hike not mentioned in this article is the rise in sinkhole claims. Citizens often claims that the rise in sinkhole claims are bankrupting the company. This rate hike is another way for Citizens to take money from their customers and not pay out claims. Citizens has already been instrumental in passing laws that limit insurance company’s exposure to sinkhole claims by restricting the types of damages that are covered.
By Robert Sparks Attorneys