Florida set to raise rates on last-resort home insurance

The Florida Office of Insurance Regulation (OIR) is accepting comments on a proposed rate increase for the Citizens Property Insurance Corporation (CPIC) until 5 pm on August 15.

CPIC is the state's "insurer of last resort" for homes that cannot get property insurance in the regular marketplace. OIR hears CPIC's recommendations for rate changes and then sets CPIC's rates. CPIC proposed an increase of 13.9% for personal multi-peril insurance in an August 1 public hearing. CPIC's rates are required, in its establishing law, to be non-competitive with approved rates in the voluntary marketplace.

Private sector insurers push to "depopulate" CPIC, meaning shift policyholders off the state-supported insurer and onto their private insurance offerings. Florida House Representative Anna Eskamani, a Democrat from District 42, which covers part of Orlando and Orange County, opposes this action. She was first elected in 2018.

"I don't think we should move to depopulate that aggressively if people don't have an affordable alternative," she said. Eskamani has sponsored a resolution to open CPIC enrollment more widely. "That would not only spread the risk around, but it would ensure that Floridians who continue to face close to no affordable options for property insurance during our hurricane season, have protection and have coverage."

The bill had bipartisan support, according to Eskamani. "The parts of the state that have had the worst hurricane damage are very conservative parts of Florida, so Fort Myers, Naples, and then most recently in the big bend of Florida, and it opens up my colleagues eyes to understanding how broken the system is," she said.

The election cycle and Florida's legislature meeting only part time in the earlier parts of the year prevented action on the resolution for the moment, Eskamani explained.

Tasha Carter, Florida's consumer advocate for insurance, which is part of its Department of Financial Services, has said that frivolous litigation is a big reason why insurers have left the state. Eskamani said litigation isn't the only reason, and can be justified.

"Litigation is often blamed for rate increases, especially in Florida, but it's more insurability," she said. "Both are factors. But it's important to note that litigation costs are not just a function of unscrupulous contractors or lawyers trying to game the system. It's also the result of insurance companies unfairly delaying, denying and underpaying claims, and there's just no way to avoid that truth, and that adds to the litigious environment."

Eskamani predicted that CPIC's rate increase will likely proceed uncontested. "The pressure from the private sector on depopulation, historically speaking, has always been very strong in Florida," she said.