WATCH WPTV’s Coverage Collapse Special in the video player below at 7 p.m. Thursday:
One week after asking for a rate hike of 14%, Citizens Insurance CEO Tim Cerio appeared on WPTV’s Coverage Collapse Special to explain why.
“We’re not raising rates because we want to raise rates,” Cerio said during the program. “The problem is now we are under a state law, a mandate under state law, to be actuarially sound but also noncompetitive, not compete with the private market, meaning we’re supposed to be slightly more expensive as the insurer of last resort.”
Citizens currently has about 1.1 million policies as it tries to lower its exposure by encouraging more homeowners into private insurance.
“We did ask for a rate increase last year, and we filed pretty much even rates this year,” said People’s Trust COO Tom Gallagher, a former Florida insurance commissioner.
“We don’t want to be at the prices we’re at, but what’s happened is the reinsurance, worldwide reinsurance market is driving those rates up because of the losses we’ve had here in Florida,” Gallagher said.
He adds the Florida insurance landscape is improving because of reduced litigation from state reforms.
Security First Insurance is among the companies seeking a small rate decrease.
“We are seeing a lot less fraud, a lot less litigation and our claims experience has also improved,” Melissa Burt DeVriese, president of Security First, said.
DeVriese said many insurance companies look at setting rates sometimes using technology and taking into account geography.
“If you’re a consumer and concerned about the price you’re paying, definitely shop around because every insurance carrier looks at risk differently but also make sure you mitigate your house,” she said.
Burt DeVriese also said condos are having a particularly tough time as buildings age and try to navigate new regulations after the Surfside tragedy.
“They haven’t been updated or mitigated,” DeVriese said. “Those could have a harder time, so there is a hard market right now out there for those commercial risks.”
The program also featured Sean Harper, a Chicago-based entrepreneur who started Kin Insurance and is writing policies in Florida online.
“What we’ve done is created a set of data science algorithms that can take all the data out there in the world, and we can have an accurate understanding of how your house built,” Harper said in describing how they set rates.
Kin has also been an option for many homeowners who have solar panels, something many insurers don’t look at favorably.
“We looked at the data and in our portfolio there is no reason to not allow solar panels, they don’t cause higher losses,” Harper said.
Moving into the 2024 hurricane season, all four insurance executives said they’ve purchased large amounts of reinsurance as predictions call for a very active hurricane season.
“If the weather turns out to be sort of not terrible, I think things probably will remain stable for homeowners across the market, and that’s really, really good,” Harper said.
If you have a question or comment about homeowners insurance, email WPTV reporter Matt Sczesny at matt.sczesny@wptv.com.