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OIR Debates Citizens Rate Increase

November 10th, 2009 by flanews

Tropical Depression Ida made landfall in Alabama this morning, but its shedding light on the fact Floridas Citizens Property Insurance doesnt collect enough money to pay claims. If the state-run insurer goes belly up, all Floridians would have to foot the bill. As Whitney Ray tells us, next year Citizens policyholders will begin paying more; the only question left is how much more.

As rain from Tropical Depression Ida pelted the state capitol Tuesday, inside state regulators debated how much to raise Citizens Property Insurance rates.

Citizens insures one million properties private companies deem too risky. In October the Office of Insurance Regulation approved a statewide average increase of 5.4 percent for 700-thousand of those policyholders. The remaining accounts, mostly coastal properties, mobile homes, and rentals, could go up ten percent.

But even if the max increase is approved the right storm in the wrong place could bankrupt the insurer. Lawmakers have limited hikes to ten percent a year for the next five years in order to better prepare Citizens to handle claims; OIR will have has the final say all increases.

We just want to make sure that the rates are accurate and that people are paying what they should be paying, said Belinda Miller, Deputy OIR Commissioner.

Not all Citizens customers will be paying more in January. Many inland home owners will pay less. Some argue homes built to with stand hurricane force winds should also see a discount.

Why would anyone want to build a wind resistant structure if not to lower their risk of damage? A lower risk should translate into a lower premium rate, said Colleen Repetto with Fair Property Taxes in Monroe.

But as the debate went on, outside the capitol the weather worsened forecasting darker days ahead for most policyholders who will be paying more. OIR has until Friday to make a ruling on a rate increase for the riskiest policies. The 5.4 percent statewide increase approved in October varies from county to county and home to home.

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