Citizens Insurance to increase number of home inspections; how will it impact rates and uninsurable properties?

The State-run Citizens Property Insurance Corp plans to increase the number of annual home inspections it conducts from 5,205 in 2020 to 90,695 by 2025. The rationale for the proposal, according to the company, is to enable Citizen to set insurance policy rates and reduce the number of claims that customers file more accurately.

According to a document detailing the proposal, and reported in the South Florida Sun Sentinel, the added inspections would focus on the age and condition of roofs, electrical systems, plumbing systems, air conditioning units and hurricane protection.

Citizens Board of Governors will consider the proposal Wednesday.

Homeowners who are not able to make the fixes recommended by the inspection, will not qualify for Citizens coverage and could be left with nowhere to turn. Citizens says the inspections could identify thousands of uninsurable properties. Even though is the insurer of last resort, Citizen is allowed to reject properties that fall short of current building codes and other state-approved criteria.

The Sun Sentinel article highlights that there are more older homes in South Florida, and more inspections could lead to higher rates and possibly more customers being rejected when they apply for new coverage or policy renewals.

Today, Citizens inspects between 2% and 3% of properties it insures, compared to 50 percent for private market companies. The new plan, if approved, would raise Citizens inspections to 9 percent and 11 percent of properties by 2025.

Citizens is the most affordable home insurance option for many homeowners as Florida has capped the company’s annual rate increases at an average of 10 percent.

For the complete South Florida Sun Sentinel article, click here.

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