Citizens Property Insurance Corporation approved a statewide average rate increase for their homeowners insurance policies in the amount of 7.5%. Rate increases to wind only policies and sink hole policies are expected to be even higher. Although this rate increase must still be approved by Florida’s Office of Insurance Regulation, consumers insured with Citizens will likely see a notable increase in their homeowners insurance premiums as a result of the rate increases. However, it is important for the consumer to understand the difference between insurance rates and insurance premiums in order to understand how rate increases will affect how much you pay for homeowners insurance in Florida.Insurance rates and insurance premiums are different. An insurance rate is the insurance company’s base charge per dollar of insurance coverage. Rates differ based on a number of factors including the age of home and the geographic location. For example, a home located closer to the coastline will generally have higher rates than a home further from the coastline. The rate establishes the foundation on which your premium is based. An insurance premium is the total cost of your insurance coverage. A premium includes all factors of your insurance policy including limits of coverages, the amount of your deductible, any discounts, etc. So, a 7.5% increase in insurance rates does not equal a 7.5% increase in insurance premiums. Nevertheless, Citizens policy holders should expect to pay more for their homeowners insurance coverage.
A direct link to the Citizens Property Insurance Corporation press release can be found here.