In a nearly three-hour rate hearing on August 25, representatives from Florida’s Citizens Property Insurance Corp. delved into and defended their recent rate filing, which included significant increases in many Florida regions, before the Florida Office of Insurance Regulation (FLOIR).
Insurance Commissioner Kevin McCarty, who led the FLOIR panel, opened up the hearing by emphasizing that Citizens is not under fire for its submitted rate proposal.
Citizens’ CEO Barry Gilway said water damage claims, which the company described as not flood-related but instead a water loss as a result of a sudden or accidental discharge of water by a pipe or water-system issues, have increased by 50 percent in severity and frequency.
“I want to be crystal clear on this issue: water losses are the major reason Citizens is seeking rate hikes for the coming year, especially in South Florida. Were it not for water loss… 99 percent of South Floridians –Miami-Dade South Florida policyholders would be seeing rate decreases,” Gilway said.
Gilway described the rise in water damage in South Florida as “very disturbing.” He said two years ago the frequency of water loss damage was 8 percent and has since risen to 13 percent, with the company now seeing an average of about 1,000 water damage claims a month. The average water damage loss 2.5 years ago was $9,000 and today is closing in $15,000, he said.
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