TAMPA, Fla. (WFLA) — The CEO of state-backed Citizens Property Insurance says he expects another spike in premiums after Hurricane Ian.
Citizens CEO Barry Gilway told 8 On Your Side Investigator Mahsa Saeida that premiums are likely to rise 20 to 30% next year, statewide. And not only for Citizens, the state insurer in the last instance, but for everyone.
So what’s behind the scary increases and can anything be done to stop it?
According to the Florida Bureau of Insurance, more than 550,000 claims were filed after Hurricane Ian. That number is expected to grow.
Mr Gilway was on the ground in the worst-hit areas, surveying the damage.
“My heart goes out to these people, it really does,” Gilway said. “The number one goal is to get the money into the customer’s hands.”
Citizens have already distributed millions. Gilway estimates that ultimately Ian will cost citizens up to $2.6 billion.
As a government entity, if citizens cannot pay claims, they can collect a surcharge or assessment. Basically, it’s a tax on all Florida policyholders – everyone.
“We are very, very well funded for this storm,” said Mr. Gilway.
There will be no statewide hurricane assessment or tax for Hurricane Ian. But what about the next storm or the next season? Are the citizens in good shape?
Gov. Ron DeSantis’ comments on the subject in Cape Coral last week made headlines.
“We had questions early on, even as the storm hit, about property insurance for citizens, which I think most of you know is woefully undercapitalized,” Governor DeSantis said.
“The governor’s statement is absolutely correct,” said Mr. Gilway. “We’re undercapitalized, I mean, there’s no doubt about that. The personal lines account, this storm is going to wipe out whatever surplus we have.”
By law, in essence, Citizens are divided into three parts or accounts. Only one section, the Personal Lines account, currently has insufficient funds.
This is because the number of citizens has more than doubled in recent years.
Two and a half years ago, Citizens had approximately 400,000 policies. They have now exceeded one million policies.
8 On Your Side Investigator Mahsa Saeidi asked Mr. Gilway about the most pressing concern for homeowners: insurance costs.
Mr Gilway says all homeowners should expect their premiums to rise by 20 to 30% next year unless there is significant reform.
The reason? Rising costs of reinsurance, insurance for insurance companies.
So should we expect a 20 to 30% increase every year going forward?
“If we don’t solve the problem,” said Mr. Gilway. “The bottom line is: These are ridiculous levels of litigation in the state — absurd levels.”
if ( window.checkSizeClasses && window.checkSizeClasses instanceof Function ) window.checkSizeClasses();
Gilways says the positive changes came after the governor called a special legislative session in May. But he believes the one-way attorney fees and award of benefits (AOB) statute must be eliminated, not just reformed.