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.