The Chief Executive Officer (CEO) of Citizens Property Insurance Corporation, Barry Gilway, recently called for legislative reform to address the growing assignment of benefits (AOB) crisis in Florida, warning of rising homeowners premiums.
Addressing the Florida Office of Insurance Regulation (FLOIR), Gilway called for assistance from legislative partners to ensure Citizens was able to financially protect its clients post-disaster, and in light of rising AOB abuse in the state.
In 2015, explained Gilway, Citizens was able to lower premiums for 72% of its policies, although three years later this has reduced to just 36%. At the same time, Citizens went from 28% of policies getting increases to 64%, with 100% of this being attributable to water losses.
In order to continue to properly and adequately manage losses, while maintaining high quality service to its customers, Gilway explained that increasing rates further in the tricounty area is necessary, especially as water losses and litigation in South Florida continues to skyrocket.
In Miami-Dade and Broward Counties, explained Gilway, rates will need to be increased by almost 10% again this year, while policyholders outside of the tricounty area are likely to see rate reductions in 2018.
“While we are thrilled to report that Citizens will again be able to respond to a major storm or series of events without the risk of assessments, we come to you today to seek rate increases for a large portion of our customers, particularly those here in South Florida,” said Gilway.
In an effort to educate policyholders on AOB issues and how this can impact rates, Citizens has produced brochures, educational pieces and alike, but urges the need for legislative assistance to mitigate and ultimately cease rising homeowners rates for its clients.
“To ensure that Citizens will remain financially able to protect Floridians when they need us most, we need assistance from our Legislative partners.
“Adequate rates not only provide the funds to keep our promises to our policyholders, but also provide competitive opportunities for private insurers to offer sometimes superior coverage at equal or lower premiums than Citizens Property Insurance,” said Gilway.