Regulators in Florida Approving Rate Increases

On Friday, September 3, 2010 insurance regulators in Florida approved rate increases for homeowners covered by Castle Key Group, a subsidiary of Allstate, that average 18.7 percent with 17.8 percent for Castle Key Indemnity policyholders.

Additionally, certain voluntary discounts will no longer be applied to the hurricane portion of the policyholders’ premiums, a factor that will also increase costs.

Among the discontinued discounts are those for retirees, the installation of fire and burglar devices, the holding of multiple polices (for instance auto and home) and buying a new home. Those discounts will now be applied only to the non-hurricane portion of the premium.

Even with several years of very mild hurricane activity, insurers in Florida have argued that their costs have continued to climb, making it difficult for them to continue doing business in the state without rate increases. Some insurers, like Cotton States, which has done business in Florida for more than 50 years, have shut down operations there.

Others, like Nationwide and State Farm, have divested themselves of thousands of policies, adding to the load already carried by Citizens Property Insurance, which carries those people who cannot secure coverage from regular vendors. As a result, the company wants to raise its average rates 6 to 11 percent depending on policy type. A hearing has been scheduled to consider the request on September 7.