Citizens Property Insurance officials will field questions today from state regulators on its request for a <a href="http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/08/citizens_proposes_average_rate.html"target="new">25 percent</a> statewide average rate hike.
The overall increase would be smaller during the first year, but the premium change for individual policyholders could be much higher than the statewide average.
"This is not the time to be raising rates on the backs of our middle class, our working class," Rep. Darryl Rouson, D- St. Petersburg, said at a Policyholders of Florida gathering this morning. "We will stand up and fight outrageous hikes...It's about the economy [and] it's about trying to stay in our homes."
The group plans to bring busloads of policyholders to the Office of Insurance Regulation rate hearing today in Tampa to oppose the proposed increase.
Regulators are expected to ask state-backed Citizens, the largest home insurer in the state, how its proposed rates factor in benefits to insurers of <a href="http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/05/scott_signs_sweeping_home_insu.html"target="new">sweeping property insurance law</a> passed this year.
They have until next week to rule on two different parts of the rate hike proposal, including Citizens' request for a statewide rate hike of 12 percent for policies that only cover windstorm damage.
State law limits the annual premium increase for Citizens policyholders at 10 percent, but the new law excluded sinkhole coverage from being subject to the cap.
That is why the overall 25 percent increase proposed includes a 428 percent increase for sinkholes, which would be capped at 50 percent for the first year.
Sinkhole coverage is required by some mortgage lenders but it does not affect renters, condo unit owners, and homeowners with multi-peril policies who choose not to purchase it. And most Citizens policyholders with sinkhole coverage will not be hit as hard as those in the Tampa area, where it's more common for the ground to shift and settle.
The insurer collected $32 million in sinkhole premiums in 2010 and projected paying out $245 million in claims expenses.
A Citizens customer and others at the Policyholders of Florida meeting railed against the new law, which was backed by the insurance industry. Sen. Mike Fasano, R-New Port Richey slammed Citizens for another “backdoor way” of raising rates: increasing premiums based on estimating <a href="http://www.sun-sentinel.com/business/fl-citizens-premiums-rise-20110415,0,7081468.story"target="new">higher rebuilding costs</a>, since that is not subject to the annual cap on Citizens' premium increases.
Consumers can send comments to regulators about the proposed rates by <a href="mailto:RateHearings@floir.com">emailing them</a> with "Citizens" in the subject line.
The OIR rate hearing is at 4 p.m. and can be viewed <a href="http://thefloridachannel.org"target="new">live online.</a>
<em>Updated at 10:55 a.m.</em>