Homeowners Insurance Rate Increase Ok’ed

Florida residents have been battling high homeowners insurance premiums for some time now, but unfortunately prices are set to increase even higher with recent approval to increase the state’s windstorm coverage. Citizens Property Insurance Corp., Florida’s state-provided homeowners insurance company, has been approved by state regulators to increase insurance average rates by 5.2 percent.

Continuous Increases on the Horizon

The increase is said to only affect people who buy wind policies; however, it comes on the heels of an increase approved in Oct. 2009 to insurance coverage premiums by an average of 5.4 percent statewide for customers who buy full-coverage policies.

According to recently-published reports, the windstorm rate change will take place in Feb. 2010 and may affect varying counties differently. For instance, some areas will see increases of up to 11 percent while others may see cuts of up to 9 percent to reflect the likelihood of windstorm damage to the home.

Rate Increase Meets Criticism

The Associated Industries of Florida has criticized the rate increase, but not for reasons you might think. The business group noted that increases need to be higher in order for Citizens to raise enough money to pay claims after a major hurricane. They argue that if enough money isn’t raised, individuals and businesses that are not Citizens customers will have to foot the bill for the company’s deficit if it is hit by a major windstorm.

While there is no proposal on the table to raise rates again this year, Citizens has been approved to raise rates as much as 10 percent a year. This may help to make up the difference – to the chagrin of customers who will have to pay much higher monthly premiums.