The average increase of nearly 30 percent could show up on your homeowner’s policy bill as early as August, but state officials are vowing to fight it.
Last summer’s devastating hurricane season has sparked dozens of rate increase requests from insurance companies in Florida. Allstate is joining in with an average increase of 28 percent statewide. Jeb Bush doesn’t have any direct say over the request, but he worries escalating costs are going to price people right out of their homes.
Gov. Jeb Bush, (R) Florida, says, “Increased construction costs, higher property taxes and higher insurance premiums, owning a home becomes more and more expensive, so it is of concern.”
Allstate has also done something other companies have not: use a provision in the law that lets them raise rates even before they get approval. Allstate would have to refund customers if the request is denied.
Allstate didn’t have anyone available to talk on camera, but a spokesman says last year’s storm season wiped out every cent of profits the company had made since Hurricane Andrew in 1992, and they had to raise rates now so Allstate would be able to pay any claims from hurricanes this season.
Florida Chief Financial Officer Tom Gallagher doesn’t buy it. He points to the company’s own financial statements that 2004 was a great year, and Allstate is generating solid returns for investors.
Tom Gallagher says, “This is a company that says one thing to their analysts and investors, and something else to their policyholders and sticking them with the bill.”
Gallagher is urging the state Office of Insurance Regulation to order Allstate not to raise rates at least until after a public hearing.
The Florida Legislature passed a new law this spring requiring insurance companies to hold public hearings for any rate hike request above 15 percent.