2010: The Year of Insurance Rate Hikes

By: Mike Vasilinda Email
By: Mike Vasilinda Email

Tallahassee, FL - Retired FSU Professor Wolfgang Adolph saw his home insurance rates go up after the storms of ‘04 and ’05.

“Nobody wants to pay more for insurance,” Adolph said. “But all in all, with home insurance, neither my wife nor I are really unhappy.”

On Thursday, regulators approved a ten percent rate hike for the 1.2 million customers of Citizens. But even with the rate hike the company’s rates are perhaps 40 percent lower than would be required to pay claims in a major catastrophe.

That’s causing problems for the entire industry.

“A lot of the Florida-based insurers have to set their rates by Citizens,” Bob Lotane with Florida Insurance and Financial Advisors said. “They’re not allowed to be higher. So, Citizens being actuarially unsound makes the private rates be actuarially unsound and too low.”

2010 may well go down as the year of the rate hike for Florida homeowners.

Since the first of the year, the state has approved 80 rate hikes. One in three companies got a double-digit increase. And there are almost 30 more cases pending.

The latest problem is sinkhole coverage. The Florida Insurance Council says many of those claims are being paid big bucks for minor damage.

“It’s another thing to contend with, claiming what’s caused by a sinkhole and then collect a lot of money from your insurance company and not even repair the cracks,” Sam Miller with the Florida Insurance Council said.

Given the number of companies being granted rate increases, there will be very few homeowners who don’t see at least a slight increase on their next bill.

Citizens customers can expect a ten percent rate hike for the next few years under legislation approved last year to try and bring rates in line with potential losses.

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  • by Fed up Location: Tallahassee on Sep 25, 2010 at 03:27 PM
    As a taxpayer and someone with sense enough not to locate near the beach, I am all for increasing the rates at Citizens. Those of us that are not covered by Citizens are back-stopping the losses of this state-owned entity. One or two big hurricanes and we will all see special assessments increased on our non-Citizens policies to bail out "Citizens". You want to have property near the water? Fine you can cover all the associated insurance risks. Don't come to me with your hat in hand to bail out your "insurance company" (Your insurance company should be called "The Citizens of Florida Insurance Company"--not "Citizens")
  • by watcher Location: nearby on Sep 25, 2010 at 03:45 AM
    Have to agree somewhat with Georgia Boy - it seems rates for everything go up and nothing comes back down or drops very little. No one has said if the insurers have adjusted and reduced the "replacement cost maximums". Since most all properties have lost value, it would seem that premiums should also be lower. Let us know if they pay you the full value of what your house was worth 4 years ago if it gets totally damaged in the next few months. Maybe they believe the greed of county tax asssessors raising taxes on lowered value properties is the right way to go and want to do the same thing. If there is a problem with people filing claims and not making the repairs - then the insurer needs to cancel the policy and tell them to find another insurance provider.
  • by Georgia Boy Location: Cairo on Sep 24, 2010 at 08:20 PM
    If insurance companies were so strapped when hurricanes devastated Florida that they had to increase rates, why haven't they decreased them since there were no hurricanes last year--or so far this year? Looks like this elevator only has an "up" button.
  • by in shock Location: tlh on Sep 24, 2010 at 04:37 PM
    why on earth would they approve a rate hike when so many people are struggling to pay the bills? I had no choice but to go w/ Citizens. I pay over $1000 in premium for only $22,000 in coverage. And now you're saying I'm going to be paying more? Absolutely unbelievable.
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