Local increase drawfs statewide average of 52.7 percent for insurer that holds policies for more than 20 percent of Collier County homeowners

By KATY BISHOP, kmbishop@naplesnews.com

Thursday, July 20, 2006

If you insure your property with State Farm, you might want to sit down before opening your next renewal notice.

State Farm property insurance rates for Collier County are rising by about 90 percent on Nov. 1 for existing customers. New customers will start paying higher rates beginning Sept. 15.

The increase is well above the 52.7 percent statewide average and will affect 941,000 policy holders in Florida.

In Collier County, State Farm rate increases are divided along U.S. 41. Properties to the west will increase by 90.2 percent and properties to the east will increase by 87.3 percent.

Lee County's rate increases are significantly less — 42.6 percent, with island properties west of the coast decreasing by 0.7 percent.

Renter's insurance will increase by 19 percent statewide.

"It’s all based on risk," said Chris Neal, Florida public affairs manager for State Farm. "We estimate how many claims we will have and what those claims will cost in the future. These areas have a higher perceived risk and so they cost more.’’

State Farm sells policies to about 23 percent of Florida’s property insurance holders, and the local percentage is probably "pretty close" to that, Neal said.

"Hurricane-resistant building techniques" are one option for homeowners who want to decrease premiums.

"We’ve had a ton of phone calls in recent months," said Albert Doria, president of Gulf Coast Insurance Group. "We usually slow down sometime around mid-May, but we haven’t slowed down at all this summer."

Doria, whose independent insurance agency offers service from many carriers, attributed increased call volume to rising rates across the board and carriers that are refusing to renew policies.

Alex Shouppe, executive vice president of Brown & Brown insurance agency, has seen increases from 20 percent to more than 90 percent, depending on the age and location of the home.

Shouppe's customers have been "frustrated and confused" by increases and by companies that have refused to renew policies, he said.

Florida's Department of Financial Services hosts a Web site outlining each insurance company’s discount requirements at: www.fldfs.com/consumers/hurricane_2006/hurricane_mitigation.htm.

Discounts of up to 39 percent are available for State Farm customers whose homes are built in compliance with the 2001 Florida Building Code.

Switching property insurance during hurricane season can be difficult, because many companies stop taking on new policies, Doria said.

It doesn't hurt to look, Doria said. Just make sure you research the company.

"If you’re with a carrier approved by the state of Florida and you're getting renewed, it would be probably in your best interest, even with a premium increase, to stay with that carrier," Shouppe said.

"Admitted" carriers are part of the state’s fund, meaning that the state will help pay claims if a company becomes financially unstable.

The number of admitted carriers in Florida has decreased, while demand for property insurance has increased, Shouppe said. This is driving up prices and making the search especially hard for homeowners.

"There were more admitted carriers in the past," Shouppe said. "But the number in the state has dwindled, and that’s the crisis right now."