Last Resort Homeowners Insurance to Cost a Lot More in Bay County

Some Florida homeowners already hit by Hurricanes this year should prepare for another wallop, this time in the form of rate increases from Citizens Property Insurance Corp, and the increases could run as high as 36 percent in Bay County.

An order signed Wednesday by state insurance regulators concludes that Citizens under-charges for insurance in many counties. It has mandated the state's insurer of last resort review and amend its rates before the end of the year.

The action likely will lead to rate increases for many Citizens policyholders.

Citizens sells a number of lines of insurance, and each type is considered separately. Citizens' wind-only coverage, which is sold as an add-on to private insurance, is not included in Wednesday's order.

A rate review of those policies also has been ordered, but there has not yet been an analysis of Citizens wind damage coverage rates.

By law, Citizens is required to stay out of competition with private companies and it charges rates higher than major insurers in that market.

But forcing Citizens to raise their rates just to keep ahead of private insurers means that eventually some homeowners will be unable to afford insurance, said Bill Newton, executive director of the Florida Consumer Action Network in Tampa.

"Citizens should run like a business. They shouldn't be forced to charge rates that aren't appropriate," he said.

Sam Miller, executive vice-president of the Florida Insurance Council, an industry trade group, said that private insurers are being cut out of certain markets because Citizens' rates are too low. In some cases, he said, Citizens charges rates 40 percent lower than a comparable policy offered by a private insurance carrier.

The purpose of Citizens is to provide coverage to people who insurance companies don't want to cover.

Citizens' records show it is adding more policyholders. As of Oct. 31, Citizens had 882,303 policies. That number has grown by 56,584 since the end of August.

In Lee and Charlotte counties, for example, an analysis of the mobile home policies showed that on average Citizens would have to raise its rates 12.9 percent to meet the statutory requirement to be no lower than the highest private insurance rate.

Homeowner policies in Bay County should be an average of 36.3 percent higher and fire insurance policies in Lake County should rise 41.5 percent, according to the office's analysis.