Prepare
to pay more for Florida home insurance
New
Florida law allows insurers to quickly pass certain costs to
customers
|
Article Courtesy of The Sun Sentinel
By Julie
Patel
Published October 1, 2009
Seven
major Florida property insurers are asking to increase home insurance
rates from 8 percent to 15 percent within the next year despite several
years without serious storms.
The insurers who are among the top 25 largest home insurers in Florida
submitted the rate proposals to the Office of Insurance Regulation. Most
of the insurers say they need the increase to pay for higher costs of
reinsurance backup coverage used to pay for catastrophic claims filed, for
instance, after a hurricane.
Private reinsurance coverage costs are rising and there is less backup
coverage available from the Florida Hurricane Catastrophe Fund, a state
reinsurer that will shrink each year for the next few years under a new
law passed by the Legislature.
The law also speeds up the process for insurers to pass certain
reinsurance costs to customers but the increase is capped at 10 percent
for any individual policyholder. Insurance Commissioner Kevin McCarty told
the Florida Cabinet recently that insurers may need to increase rates to
offset drops in claims-paying reserves.
Tom Zutell, spokesman for the Office of Insurance Regulation, said the
office "will of course follow the law and continue to have our
actuaries diligently review all rate filings to ensure they are not
excessive, inadequate or unfairly discriminatory."
Universal Property & Casualty Insurance has proposed increasing
statewide premiums by an average of 9.8 percent. With about 461,000
policies, Universal is the state's third largest home insurer after
state-run Citizens Property Insurance Corp., which plans to boost premiums
next year by up to 10 percent, and State Farm, which plans to the leave
the state.
Among those with the highest proposed increases is Orlando-based St. Johns
Insurance Co., which has more than 198,000 policies and proposes
increasing rates for home and condominium unit owners by a statewide
average of 14.9 percent. Liberty Mutual Fire Insurance Co., which has
about 99,000 policies, asked to boost statewide rates for home and
condominium unit owners by 14.7 percent and renters' insurance rates by
12.7 percent.
In its filing, Universal says it wants to "remain competitive and
grow in key regions," St. Johns says its request mainly includes
revised reinsurance costs and Liberty Mutual says it needs the increase
because of the catastrophe fund and because of losses on claims.
American Integrity Insurance, Southern Fidelity Insurance and United
Property and Casualty Insurance have also asked to increase rates.
Lisa Miller, a former deputy insurance commissioner and spokeswoman for
American Integrity Insurance Company, said the rate increase will allow
company officials to keep "keep their promises to their
customers."
McCarty along with representatives from Citizens and the catastrophe fund
will field questions on the state of Florida's insurance industry from the
Senate banking and insurance committee on Tuesday.
|