Citizens Property Insurance Corp. is raising rates after its board of directors met on Wednesday. The rate increase is a result of a new state law signed by Florida Governor Ron DeSantis and will vary across Florida, but the increase still requires approval from the Office of Insurance Regulation.
“These necessary adjustments reflect the efforts of the Florida Legislature to return Citizens to its role as a residual insurance company,” Citizens Chairman Carlos Beruff said in a press release. “Unfortunately, we have become the first choice, or only choice, in too many regions of the state.”
The new law prohibits contractors from soliciting homeowners to file claims for their roof, and roofers have filed suit against the law saying it discriminates against them and prevents them from advertising. Citizens expressed disappointment after U.S. District Judge Mark Walker found the new law violated free speech rights of roofing contractors.
The law would have kept the roofing company from using “prohibited advertisement” like emails, flyers, and pamphlets.
“It is also clear that the threatened injuries to plaintiff from banning plaintiff’s truthful commercial speech outweighs the state’s interest in preventing fraud, protecting consumers from exploitation, and stabilizing the insurance market,” Walker wrote.
Citizens President and CEO Barry Gilway said they were “disappointed” in the ruling.
“I understand the logic behind the order,” Gilway said. “But the bottom line was, in my opinion, the solicitation rate is being driven substantially by the solicitation, and aggressive solicitation of claims.”
One of the other sources of rate increases is the Office of Insurance Regulation, which gave consent to three insurance companies to cancel or not renew more than 53,000 policies. Only approximately 1,000 policies that were canceled were for Floridians insured through Citizens.
Florida Republicans scaled back the bill but still felt it was a step in the right direction.
“Rates aren’t going to go down tomorrow, of course,” said State Rep. Jim Boyd (R-21). “But I firmly believe this will have a definite downward impact on what has been continually rising homeowners’ rates in Florida … I really, truly believe we have done a lot of good toward getting at the root causes of the problem.”
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