Although Florida has not seen a major hurricane touch its shores since Hurricane Wilma in 2005, Citizens Property Insurance Corporation may be raising rates on many of its policyholders. Earlier this month, Insurance Commissioner Kevin McCarty approved additional rate increases that will affect thousands of insureds, including many condominium associations.

Citizens is the state’s largest residential insurer, issuing policies covering over 1.2 million properties in Florida. By law, Citizens’ rate increases are limited to 10% per year. This amount can be increased, however, to increase funding in the Florida Hurricane Catastrophe Fund.

While some policyholders may actually see rates slightly decrease, many will see the opposite. "High-Risk Accounts" (policyholders along the coastal areas that are more prone to hurricanes) and "Commercial Lines Accounts" will all see rate increases in 2011. As most condominium property falls into one of these two categories, associations should anticipate their premiums going up shortly.

Commercial Lines Accounts, including associations that are not in traditionally hurricane prone areas, will see an average rate increase of 8.1% in 2011. Associations in "high risk" areas along the coast will likely see its windstorm policies increase by an average of 11.3%.

As Citizens was created to be an "insurer of last resort," premiums are statutorily increased over other private insurers. Therefore, these rate increases will make already expensive policies more costly.

Citizens serves an important purpose. It provides vital property insurance to individuals, associations, and businesses when private insurers will not. Thankfully, with the absence of hurricanes since 2005 many private insurers, with less costly rates, have come back into the market. Associations that are paying large premiums to Citizens, or any other carrier, should check with their agent for a more cost effective alternative. You may be surprised to find that you can find the same coverages for significantly less than you are paying now.