Tallahassee, Florida - Citizens Property Insurance Corp. says it needs to raise premiums for sinkhole coverage an average of 263 percent statewide to cover the company's risk.
In some areas, such as Pasco County, customers would see premiums triple in cost under the proposal.
The state-operated insurer says it's losing hundreds of millions of dollars on sinkhole claims. Last year the company collected about $50 million in sinkhole premiums but paid out nearly $500 million in sinkhole claims.
Citizens is also pushing to raise overall rates an average of 7.5 percent next year.
Former state Insurance Consumer Advocate Sean Shaw says Citizens must appreciate that it's the only insurance option for a lot of people so keeping rates affordable for them should be a priority.
"People have to be able to afford property insurance. You cannot just jack it up to the point where the actuaries say it needs to be all the time because there's got to be an affordability aspect."
Citizens' Board of Governors will vote on the proposed rate hikes next week. Christine Ashburn of Citizens Property Insurance says she expects the board will consider phasing in rate hikes so homeowners don't get socked with a huge increase all at once.
"These have got to be done over time. You can't just flip the switch tomorrow and expect that there won't be an adverse impact to that. But obviously we still have to do what we can within the law and make sure we're following the law. We can't ignore the rate need but at the same time absolutely it can't be expected that a homeowner can just pay three times as much tomorrow. That's not reasonable."
Even if Citizens' board approves higher rates, they still need approval from the state Office of Insurance Regulation.