The big insurance rate cuts promised to Florida homeowners under the state's 2 1/2-month-old reform plan are out there. Try the 47 percent cut offered by USIC of Florida for Palm Beach County homeowners, for example.
But like the lottery, only a lucky few will hit the jackpot. That's because USIC covers only 126 homes in Palm Beach County. The tiny insurer, with just 2,000 policies around the state, covers only 16 in Martin County - where it is cutting rates by 42 percent, according to state records.
Meanwhile, State Farm Florida Insurance Co., the state's second-largest insurer, is proposing that the 75,404 homeowners it covers in Palm Beach County and the Treasure Coast get a comparatively tiny rate cut of between 8 and 11 percent. That's only slightly better than the 7 percent average the insurer is asking regulators to approve statewide.
But even the small cut may not be that apparent because many State Farm policyholders are yet to get hit by the rate increase the company instituted - upon renewal - last November. The hike is sending rates soaring by more than 70 percent locally.
And so it goes under the rate reduction plan signed into law by Gov. Charlie Crist in late January as part of a massive property insurance reform.
The insurers offering the biggest cuts are the smaller companies that cover only a fraction of policyholders.
Even then, smallness is no guarantee of a significant reduction in premiums.
Liberty American Select Insurance Co., whose new rates have been approved by insurance regulators, is offering a zero percent reduction for its 1,834 policyholders in Palm Beach County and 620 in Martin County.
But its 3,627 policyholders in St. Lucie County will be faring much better: they will be receiving a 40 percent rate reduction.
But it's the policyholders of major insurers - which have about 60 percent of the homeowners market - that are the least likely to get rate relief from premiums that have doubled and even tripled in many cases over the last several years.
That fact clouds the rate reduction plan.
Allstate Floridian, the state's third-largest insurer, with 388,104 policies, plans an average cut of 14 percent statewide, but its planned reductions will be only 9.3 percent in St. Lucie County and 12 percent in Palm Beach County. Martin County residents fare the best, with an 18.7 percent reduction.
'Wait and see'
In all cases, the rate reductions proposed by the big guys are less than the 24 percent statewide average predicted by insurance regulators March 1.
In South Florida, rate reductions up to 50 percent in coastal areas were detailed.
Insurance Commissioner Kevin McCarty proclaimed Florida homeowners "can take comfort that relief is on the way."
And Bob Lotane, a spokesman for the state Office of Insurance Regulation, reiterated recently that Florida homeowners shouldn't despair.
''We're urging people to be patient and wait and see,'' he said.
Lotane reminded that most of the 150-plus rate reduction filings by insurers are still under review, and regulators will reject those that do not deliver the full savings mandated under the rate reduction act.
Insurance regulators have approved the decreases of 14 companies so far, but only two are among the 10 largest insurers - state-sponsored Citizens Property Insurance Corp. and American Strategic Insurance Co., according to state records.
Lotane said that because the June 1 deadline for the rate reduction to go into effect is approaching, regulators might have to temporarily allow some of the smaller cuts to take place as proposed.
Then, once insurers provide detailed financial records at the latest by Sept. 30, regulators can determine whether they should be required to make further cuts, he said.
Reinsurance fund grows
The rate decreases are based on the expansion of a state fund that sells companies reinsurance - insurance for insurance companies - at rates discounted from the private market.
Florida insurers were hit with hundreds of millions of dollars in increased costs after reinsurers imposed major price hikes after the destructive 2004 and 2005 storm seasons.
State lawmakers decided during a special session in January to allow the nonprofit Florida Hurricane Catastrophe Fund to increase the amount of discounted reinsurance it was selling from $16 billion to at least $28 billion.
As a result, the approximately $2.5 billion Florida insurers were paying for $12 billion of coverage in the private reinsurance market in 2006 will be reduced to around $200 million this year.
But the promise of major rate cuts from insurers as a result has left state lawmakers wanting.
''I'm disappointed at some of these smaller decreases by the major insurers,'' said state Sen. Bill Posey, chairman of the Senate Banking and Insurance Committee. ''State regulators need to find out what happened."
Calculations not exact
The Consumer Federation of America's Robert Hunter, who was hired by the state to determine how much insurers should reduce rates, said the calculations were not exact.
He said the average 24 percent rate cut insurers were supposed to use as a guideline was only an estimate based on the reinsurance purchases of 11 of the state's insurers.
''It was definitely a valid approach, but we knew it wasn't precise,'' Hunter said.
He said regulators also realized that some insurers such as State Farm would pass on smaller savings because they were already buying discounted reinsurance in the private market at prices similar to the state catastrophe fund.
But Hunter said even he was surprised at how small some of the cuts have shaped up to be, such as State Farm's average 7 percent.
State Farm spokesman Chris Neal said the company is not even saving 7 percent but was making a good-faith effort in the spirit of cooperation.
"It's a stretch,'' he said.
Locke Burt, president of the Ormond Beach-based Royal Palm Insurance and Security First Insurance companies, said his units' $100 million-plus reinsurance bill will be cut by about 20 percent because of the cheaper coverage it will buy from the catastrophe fund beginning in June.
With its new rates approved by the state, its policyholders in Palm Beach and Martin counties will get a 20 percent reduction. St. Lucie policyholders will see a 16 percent cut.
Burt said smaller companies have benefited the most from the expansion of the catastrophe fund because they did not have the buying power of the bigger companies to demand the lowest reinsurance rates.
But Burt, a former state lawmaker, said he would not have voted for the rate reduction plan if he were still in the legislature because all insurance policyholders will end up paying more policy surcharges if there is a major hurricane.
He added that its a positive that some homeowners will be getting rate breaks, but lawmakers have put a tremendous amount of potential liability on Florida residents.
"The bad news," he said, "is if the wind blows, they will pay the bills."