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Rates for High-Risk Accounts Going Up
11/20/09 - 02:18 PM

Associated Press

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Rates for high-risk accounts with the state-backed Citizens Property Insurance Corporation are going up.

Mobile home owners will see the largest rate hikes. Those policies will increase 11 percent in 2010.

Homeowner rates will jump five percent, while condominium associations and commercial properties will rise nine percent.

The Florida Office of Insurance Regulation approved the new rates to help Citizens move its rates closer to an actuarially valid level. These are the first of more hikes for Citizens’ customers in the future.

Spokeswoman Belinda Miller says Citizens needs more premiums to make sure it can cover all claims.

“We want them to be able to meet their obligations and to pay claims. But what we don’t want them to do is increase rates dramatically all in one year. We want them to get there over time.”

“There’s a cash build up factor that was implemented for the Hurricane Catastrophe Fund and that’s on top of the 10 percent. So you’ll see some of them are 11 or 11.5. It’s not a big number this year. It goes up too a little bit each year as does the premium for the Cat Fund.”

While the Legislature limited rate hikes to 10 percent a year for any Citizens policy, mobile home policies are rising 11 percent because the law allows some extra premium to shore up the state’s Hurricane Catastrophe Fund. That so-called cash build-up factor is not subject to the 10-percent cap.