Insurance rates at Citizens Property Insurance Corp., Florida's state-run insurer of last resort, are headed higher. Citizens' board, met on Wednesday in Miami, and voted to boost overall rates by a total of 7.5 percent next year.
Overall personal insurance rates will jump 6.6 percent, with homeowners seeing an average 6.2 percent rate hike and condominium unit owners facing an 8 percent rate increase in 2014.
Commercial rates are slated to go up 9.1 percent.
Sinkhole coverage -- which is optional and not covered by 10-percent annual cap on increases, is slated to rise much higher than other types of coverage. In Florida's west coast counties like Hernando and Pasco, rates will rise 20 percent, under the board's action Monday. Hillsborough County will see sinkhole rates jump 50 percent.
According to Citizens, in Pasco County, premiums for sinkhole coverage alone cost homeowners about $1,800 a year. But that's still far below the "actuarially sound'' rates -- the levels that risk evaluators estimate the rates should be to cover potential losses.
The vote to hike rates comes as Florida's property insurance market is in rapid change and many consumers are confused and frustrated.
Citizens is aggressively pursuing plans to jettison hundreds of thousands of policies in a bid to reduce its risk and return to its original mandate as the insurer of last resort.
In a bid to pare its risk, Citizens is creating a clearinghouse to review new applications for residential coverage.
And it's working aggressively to find private companies to "take out'' its policies. In a controversial deal -- Heritage Property and Casualty Insurance Co., a St. Petersburg-based company that was created last year and made major political contributions to Gov. Rick Scott -- will get up to $52 million from Citizens to assume up to 60,000 Citizens' policies.
Citizens is also dumping homeowners with higher-value homes.
Under a state law passed this year, Citizens will be barred from insuring homes over $1 million beginning next year -- leaving most Miami-Dade waterfront properties and those in upscale neighborhoods such as Coral Gables struggling for alternatives. That cap that will be lowered by $100,000 annually to reduce the maximum value to $700,000 by 2017.