Wind Insurance - Citizens

Wind insurance affordability is a critical need for our constituents and a key component in preserving housing affordability and the Keys’ strong local economy, which is a valuable economic engine for the state. 

High insurance costs and limited coverage negatively impact our citizens, our workforce, our property values, and our economy. Monroe’s already high rates are compounded with annual increases. These costs exacerbate the county’s affordable housing crisis.

Addressing this issue requires working with and monitoring Citizens Property Insurance Company’s windstorm coverage to preserve and enhance affordability (and, with the Office of Insurance Regulation, to address annual rate increases) and to oppose efforts to increase premiums, reduce coverage, and reduce eligibility.

Citizens Property Insurance Company (“Citizens”)

The vast majority of properties in Monroe County have wind insurance coverage through Citizens Property Insurance Company.   

  • Citizens Property Insurance Company (“Citizens”) was created in 2002 by the Florida legislature to provide wind insurance (and general property insurance) for homeowners in high-risk areas who aren’t able to obtain insurance coverage in the open, private insurance market.  It is a government-owned, not-for-profit, insurer of last resort.
  • Citizens is governed by an 8-member Board of Governors that administers its Plan of Operation. The Governor, Senate President, House Speaker, and CFO each appoint reps to the Board. Citizens is subject to regulation by the Florida Office of Insurance Regulation (OIR.)

Citizens and the Florida Legislature

The Florida Legislature and the governing board of Citizens continue to express the need to increase premiums. Some even advocate eliminating the rate cap altogether. Additionally, they continually seek ways to “depopulate” insureds from Citizens by restricting eligibility (home values over a certain amount) or pushing insureds into “take out” private insurance companies (that are not subject to the cap on annual increases) 

These recent legislative actions demonstrate the constant pressure exerted on Citizens' premiums and eligibility.  

  • During the 2021 Legislative session, lawmakers passed a bill to increase Citizens’ annual rate cap (for the first time since 2010) to 11 percent in 2022, and an additional 1 percent each year for the next 5 years. 
  • During the 2022 Legislative session, lawmakers sought (but ultimately failed to pass) legislation to increase surcharges on Citizens policyholders, remove non-primary residences from the rate cap protections, force take-outs for offers up to 20 percent higher than the current Citizens' premium, and allow take-outs by surplus lines insurers (unregulated, and often undercapitalized companies) .

Citizens and Monroe County 

Monroe’s insureds pay the highest wind premiums in the state despite a number of factors that should work to lower our premiums:

Wind insurance premiums are unjustifiably highest in Monroe: Monroe’s residential and commercial Citizens’ wind insurance rates are the highest in the State. Monroe’s premium rate is 175 percent higher than the median coastal rate. Our rates have doubled over the past 10 years.

Premiums paid by insureds far exceed claims payouts: Premiums charged by Citizens do not reflect actual risk. There has never been a single year, including 2017's Hurricane Irma, in which Monroe’s claims exceeded its premiums paid.

Monroe’s building standards justify lower premiums: Monroe County’s building standards are among the most rigorous in the state, yet this is not reflected in Citizens’ rate calculations for Monroe. 

The modeling used is unfavorable to Monroe: Catastrophe model loss projections do not incorporate local building codes.

Monroe County is NOT a contributor to statewide issues that drive up costs for Citizens: Monroe’s insureds cost Citizens $0 in AOB abuse, $0 in sinkhole losses, and are not a contributor to the more recent spate of fraudulent and frivolous lawsuits related to roof replacements underpinning the latest property insurance crisis in the State.

Citizens statute requires affordability: affordable property insurance is a key component in preserving the Keys’ strong local economy. The legislature recognized the importance of affordable property insurance, but Citizens has failed to apply an “affordability” definition or standard beyond capping annual increases to 10 percent (now 11 percent).

Monroe’s Legislative Advocacy

The preservation of affordable wind insurance is one of the Monroe County Board of County Commissioners’ highest state legislative priorities. Its current positions include:

  • SUPPORT for a legislative carve-out for Monroe County that reduces the Citizens’ annual rate increase maximum from 10 percent to a COLA-based annual increase, recognizing Monroe’s unique affordability issues, strong building codes, and overall importance to the State of Florida. 
  • SUPPORT for legislation that exempts Monroe County from the annual wind insurance rate increase passed last session (11-15 percent over the next five years) and maintains the county’s rate cap at 10 percent, recognizing Monroe’s unique housing affordability issues and strong building codes. 
  • SUPPORT for legislation to help lower premiums and annual rate increases by requiring Citizens to: 
    1. Apply mitigation credits that account for Monroe’s rigorous building standards; 
    2. Apply an affordability definition or standard, per the statutory language mandating affordability.
  • OPPOSE legislation that limits eligibility and availability of Citizens’ coverage (particularly in areas such as Monroe, where there is no reasonable degree of competition for windstorm insurance) 

Fair Insurance Rates for Monroe (FIRM)

Monroe County works closely with FIRM, a highly effective local property insurance advocacy organization, to protect and preserve the insurance interests of Monroe’s constituents. More information can be found at their website https://firmkeys.org/.