The Cuban community residing in Florida, like the other property owners in the state, faces a complicated situation regarding homeowners' insurance.
The state-owned Citizens Property Insurance Corp. warned that it intends to push for a rate increase that could affect more than a million property owners. Homeowners in Florida should be vigilant and readjust their expenses to face what is coming.
Citizens, created by the government as a last-resort insurer, has a notable client portfolio, with over a million policies that could increase its cost in 2025.
Property owners turn to the company to avoid high rates in the private market. This is causing insurance providers to disappear in areas of Florida. One might think it strengthens Citizen, but the company fears it could get into trouble if natural disasters occur and it cannot pay so many clients.
This important state insurer has requested a general rate increase from the Florida Office of Insurance Regulation (OIR). Multiple peril homeowners' policies could increase by 13.5%.
Condominium owners would see an average increase of 14% in their home insurance. According to the executive president, Tim Cerio, these increases are necessary because Citizens currently charges less than private insurers, which distorts the market and hinders the recovery of the sector.
If the Office of Insurance Regulation approves the proposal, the new rates would take effect upon renewing policies starting January 1, 2025.
The multiple risk homeowners insurance policy is usually the most common in Florida, as it covers structures and personal belongings. In Miami-Dade, with an average family income of $65,000, the average premium would rise from $5,113 to $5,804 annually, according to Diario Las Américas.
In 2025, homeowners with properties valued at over $600,000 will be required to have flood insurance, implemented gradually to protect their properties, as this is one of the natural disasters that most affects homes.
The increase in the value of insurance policies will affect homeowners in Florida, who are already facing high living costs and are burdened by expenses set by homeowners' associations in order to comply with legal regulations for higher maintenance reserves following the Surfside tragedy.
Regulations in the real estate sector are tightening. In June, Governor Ron DeSantis signed law HB 1049, which promises to improve transparency in the buying and selling of properties in the state.
The regulation aims to protect buyers from potential scams related to properties affected by natural disasters, especially floods.
DeSantis believes that if Citizens is approved for the 14% increase (the allowed annual limit), the company's rates would still be more affordable than those of other private insurers.
The growth of Citizens leads to a reduction of private insurers in the state. It should be noted that in June 2020, the state company had 474,630 policies and has tripled that number in three years. The lack of competition in some areas of the state, such as the Florida Keys, exacerbates the situation.
The consolidation of Citizens Property Insurance Corp. as the main insurer in the state and the potential increase in rates are crucial issues that require attention. Property owners must be informed and prepared to face these changes in the insurance market.
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