TALLAHASSEE, Fla. Condominium associations covered by Citizens Property Insurance should brace themselves for an average statewide rate increase of about 20 percent in the coming months.

At a meeting in Tallahassee, Citizens' board on Thursday approved a rate-increase request from its staff and will submit it to state regulators, said Justin Glover, Citizens' spokesperson.

Condo associations will have a chance to voice their concerns about this increase at public hearings that insurance regulators will call once Citizens has submitted its filing. State law requires public hearings when an insurer requests a rate hike averaging more than 15 percent.

The state-run insurer of last resort covers 36,554 condo associations statewide, with more than half of that exposure -- 20,749 policies -- in South Florida. These policies generally cover the building structures.

Citizens must increase its condo association rates now because the Australian company QBE Insurance Group has just begun raising its rates by an average of 38 percent, and state law requires Citizens to charge the highest rates. This measure is designed to encourage consumers and businesses to shop around for a private insurer rather than turn to Citizens.

Condo associations are already reeling from double-digit rate increases in recent years as well as hurricane-related expenses.

Anticipating the hikes, Joseph Buerk, president of the 61-unit Seacrest Towers Condominium Association in Pompano Beach, insisted on doubling the budget for insurance, from last year's $47,000 to the current $90,000 a year, for its QBE premiums.

That comes to about $1,500 per unit. Individual owners usually get additional insurance to cover the interiors of their units, and they have been hit with increases as well.

"Something has got to be done," he said Thursday. "It's ridiculous, the costs are so high."

The market for condominium association insurance, already tight before the 2004 hurricane season, has clamped down even more. Citizens and QBE are among a handful of companies still writing this coverage.

Southern Family, a unit of the Poe Financial Group, has been selling condo association coverage as well. But the company announced earlier this month that it will cancel policies as they come up for renewal because of its financial problems since the 2004 storms. That means more policies will be flowing into the Citizens' pool.

In another action, Citizens' board also approved changes to its underwriting guidelines that will give owners of older homes a break. Surcharges on policies will be removed for homeowners who retrofit their homes and bring them up to the current building code.

Surcharges on these older homes ranged from 1 percent for a 20-year house to 20 percent on homes more than 40 years old.

Copyright © 2006, The Miami Herald, Beatrice E. Garcia. Distributed by Knight Ridder/Tribune Business News. Miami Herald staff writer Donna Gehrke-White contributed to this report.