TALLAHASSEE -- The state's insurance regulators sharply questioned Citizens Property Insurance officials Tuesday, challenging a proposed rate hike for high-risk policyholders with wind protection.

The state-run insurer of last resort requested statewide average increases of 7.5 percent for homeowners and 9.9 percent for businesses that hold plans that cover only wind damage. Wind-only policies account for about a third of Citizens nearly one million policies.

At the public hearing, analysts for the Florida Office of Insurance Regulation took issue with a 15 percent surcharge that has been added to each Citizens high-risk policy for years.

The analysts suggested Citizens incorporate the surcharge into the base rate. Doing that would lessen the effect of the premium increases for the 300,000 policyholders with wind-only coverage.

Under this calculation, homeowners with wind-only coverage would see an average increase of 4.4 percent and businesses an average increase of 9.3 percent. Actual rates would vary widely depending on where policyholders live.

The company is seeking rate hikes no greater than 10 percent for all plans after the Legislature lifted a three-year freeze and ordered Citizens to build its reserves enough to cover claims from a major hurricane.

If the insurer doesn't have enough money to cover claims, it can levy fees on all insurance policies in the state.

Paul Palumbo, a vice president with Citizens, said the surcharge generates about $100 million and helps cover financing costs associated with hurricane claims.

``[The rate increases] are appropriate, they are fair and they should be approved as filed,'' Palumbo said.

A decision from the state's insurance regulators is expected Nov. 20.

John Frank can be reached at jfrank@sptimes.com.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@