Well, the state's largest home insurer, Citizens Property Insurance Corporation, is raising rates for hundreds of thousands of its customers.

80% of Citizens policy holders statewide will face a rate hike.

On average, those customers can expect an 8.6% rate increase.

Governor Ron DeSantis says this is good news.

The increase is less than what citizens had asked the state to approve.

Other insurance companies also say the higher rate at citizens is a necessary move to save the state's struggling insurance market, which has seen several insurance companies fail or leave Florida.

But the benefits of higher rates are a hard sell.

When homeowners across our state want relief from some of the highest property insurance rates in the country.

Folks like John Miksula who moved to Punta gorda from Chicago four years ago.

He says budgeting has been tough because he depends on Social Security, and the annual cost of his home.

Insurance has doubled in just about four years.

After the hurricanes came.

Now it's up to about $3,800 a year, and I'm still less than half of my neighbors in the area.

Everybody's talking about their insurance rate, or at 5000, 6000.

I even have some couple of neighbors are moving back up north because they figure they can't take this anymore.

To help us understand where the insurance market is going.

We are joined now by Mark Friedlander with the Insurance Information Institute, an industry association.

Thank you for joining us, Marc.

Thanks so much for having me today.

So, Marc, I know that you believe these ongoing increases by citizens is a positive thing.

Long term for homeowners.

But first, I think it's important for you to explain to everyone what is Citizen's Property Insurance Corporation and why its impact is so critical to the entire market?

Citizens Property Insurance Corporation is the state backed insurer of last resort, which was created by the Florida Legislature to act as a backstop for those consumers that cannot find coverage in the private market.

So why do you think citizens continuing to increase its rates is a positive thing for Florida homeowners in general?

Citizens grew at an extremely high rate for several years because of Florida's Man-Made risk Crisis of Legal System Abuse and Assignment of benefits claim fraud.

In fact, at year end 2023, citizens had 18.5% market share, by far the largest home insurance the state of Florida.

You never want your backstop insurer to be your largest market.

And there are several reasons for that.

I mentioned a couple of the factors of the Man-Made Risk Crisis, but also, citizens have been selling insurance at a discounted rate, and that is mandated by the state regulations.

They don't allow citizens to charge what we call actuarial sound rates.

So as a result, citizens typically will always be the best price any consumer could get.

And citizens is not intended to be a lifetime insurer, only a backstop when there's no other options.

Well, now that the private market has improved substantially, it's time to get customers off as citizens.

And they've been going through a very extensive de population program, moving several hundred thousand customers to the private market through de population.

It's because the private markets financial position has improved.

They're able to take on more risk exposure.

But in order for that de population to continue in a positive fashion, citizens needs to have unattractive rates.

So citizens needs to raise the rates to get to an actual sound level and no longer compete with the private market.

That is the goal of the rate changes that we're talking about today.

Help us to understand when citizens gets too big, what is the risk to all of us?

What happens when citizens risk exposure gets too big?

We have the potential of what's called a hurricane tax, which is a surcharge that could be applied not only to all existing citizens customers, but an emergency assessment to every consumer in the state of Florida.

And we're not just talking about homeowners.

We're talking about renters.

Those that have a renter's insurance policy, talking about auto insurance policies, pet insurance policies, life insurance policies, every type of policy written in the state of Florida could see a multiyear assessment, which we finally call the hurricane tax.

We don't want to see that scenario.

Citizens doing a great job depopulate.

And it needs to continue to come down.

A few hundred thousand more customers need to be moved to the private market over the next couple of years to get to a stable position.

Because in order for Florida to have a stable marketplace statewide, we need citizens to be a much smaller risk exposure.

Homeowners watching may have a hard time understanding why the market is struggling, when they feel like they've been paying higher and higher rates every year.

Florida consumers have been paying higher rates because of the Man-Made Risk Crisis once again.

Billboard attorneys drove this crisis.

They took advantage of loopholes in Florida regulations to sue insurers at historical levels.

In fact, four out of every five property claim lawsuits in the U.S. for many years were filed in Florida.

That's a disproportionate level.

Now, some attorneys may tell you that insurers need to be sued to pay claims.

And there are situations where there might be a claim dispute.

We don't disagree with that.

But it was an extreme of we're talking about 80 to 100,000 lawsuits a year in Florida for several years, completely an out of control situation that the legislature finally addressed in a special session in December 2022.

At that point, we already had seen six Florida insurers go insolvent.

Mark with the 10s, I have.

So we're left.

What do you expect from the state legislature?

Is there still more that needs to be done?

And do you expect rates to turn around here for homeowners soon?

Rates have moderated in Florida.

Florida had the lowest average rate changes in the US last year.

We don't expect the legislature to pass any bills that would upset the current dynamics where the market is vastly improving.

Mark Friedlander, thank you so much for your time.

We appreciate it.

Thanks for having me.