State-backed Citizens Property Insurance urged regulators Thursday to back a request for an average 6.8 percent rate hike to cover a surge in water-damage claims.
The Florida Office of Insurance Regulation, which held a two-hour hearing on the proposal, is expected to rule in early September.
Insurance Commissioner David Altmaier said after the hearing that regulators will take their time “vetting the issue.”
The requested change, if approved, would go into effect Feb. 1.
For customers, changes would vary by policy and location.
For example, rates would go up an average of 6.3 percent for inland homeowners who have multi-peril policies, which include coverage for water damage, according to Citizens.
Multi-peril policies for coastal homeowners would see an average increase of 8.6 percent.
Wind-only policies for personal-lines customers also would go up an average of 8.3 percent, under the proposal.
Officials from Monroe County, which includes the Florida Keys, requested a rate hike on wind-storm policies in their county be delayed for up to three years.
Key West resident Joe Walsh, representing the group Fair Insurance Rates in Monroe County, read regulators a list of Keys residents who said they may have to move out of the county due to rising premiums.
Altmaier called it “troubling” if anyone has to consider moving because of insurance rates.
Citizens President & CEO Barry Gilway said after the hearing the regulators were “very, very fair” in their questioning.
The driving factor for the requested hike remains an increase in water-damage claims — initially concentrated in Southeast Florida but now appearing statewide — and a related, politically charged issue known as “assignment of benefits.”
When homeowners need repairs for problems such as water damage, they sometimes sign over benefits to contractors, who ultimately pursue payments from insurance companies.
Citizens and other insurers have lobbied in the Legislature for restrictions on assignment of benefits, contending the practice leads to fraud and litigation.
But plaintiffs’ attorneys and contractors argue, in part, the practice helps homeowners hire contractors quickly to repair damage and also can help force insurers to properly pay claims.
The plaintiffs’ lawyers and contractors — none appeared at Thursday’s hearing — also contend assignment of benefits can help prevent consumers from having to fend for themselves in insurance disputes.
Earlier this year, the Office of Insurance Regulation reported the state had seen a 46 percent increase in water-damage claims and a 28 percent increase in costs since 2010.