The chair of the Florida House’s Insurance and Banking Subcommittee floated the option of raising the cap on rate hikes on Citizens Property Insurance customers to 13 percent on Tuesday.
Rep. Bryan Nelson, R-Apopka, said homeowners would be willing to pay an additional 3-percentage points if it would reduce the possibility of potential “hurricane taxes” after a catastrophe.
The cap, currently at 10 percent, has been in place since 2009, and followed a freeze on all rate increases under then-Gov. Charlie Crist.
Citizens President, Barry Gilway, speaking before the Insurance and Banking Committee on Tuesday said getting higher insurance rates is the most direct way to shore up Florida’s private market.
“We talk about the need to get outside competitors coming in, back in, to Florida,” he said. “And we’re going to be talking about many different approaches to depopulating Citizens. But creating a competitive marketplace in Florida, basically comes down to creating competition.”
Gilway said Citizens has been undercutting the private market with below-market rates, but that the 10-percent “glidepath” on rate hikes should not be completely stripped because that would devastate parts of the state.
He said it is up to the Legislature to decide how large of an increase in rates should be appropriate. Gov. Rick Scott has agreed that Citizens is undercutting the market with too-low rates but has not weighed in with any specific proposals for how much rates should increase.
Nelson said he would be looking at raising the cap from 10-percent to 13-percent.