State Farm to boost property insurance rates more than 50 percent
BY DAVID ROYSE
ASSOCIATED PRESS WRITER
TALLAHASSEE, Fla. -- State Farm, one of Florida's largest insurers, will raise property insurance rates by an average of 52.7 percent this year under a plan approved Tuesday by state regulators, giving the company a much smaller rate increase than it initially sought.
The company had filed plans in May for what would have effectively been an average increase of nearly 80 percent statewide, but the Office of Insurance Regulation balked at that proposal.
The company, which covers about one in five Florida homeowners, filed its amended plan Tuesday, and OIR officials said the numbers more closely matched what state actuaries had considered appropriate.
Insurance Commissioner Kevin McCarty acknowledged that the lower increase would be little consolation to customers.
"While this approved rate is sharply less than what had originally been filed it is still substantial, and I am deeply concerned about the effect it will have on the household budgets of Floridians, particularly those with low incomes or on fixed incomes," McCarty said in a statement released by his office.
"One of the foremost mandates of my job requires me to approve rate requests that are justified and that will provide the company the ability to pay the claims of Floridians whose homes are damaged or destroyed due to catastrophic storms, and I am confident the rate we are approving is justified under law," McCarty said.
State Farm spokesman Chris Neal said he couldn't immediately comment on the rate increase. It wasn't clear when customers will begin paying higher premiums, but the initial filing would have gone into effect Aug. 15 and state officials recently said they expected the date to remain unchanged by the amended filing.
Home insurers have been requesting large rate increases and in some cases not renewing policies in Florida following two years of heavy claims from hurricanes and fears of a more active period that have led to much higher costs of reinsurance.
The company said when it made its initial filing that the increase was needed largely because of higher reinsurance costs. Reinsurance is coverage for insurance companies, bought to back up the company should it have massive claims.
ASSOCIATED PRESS WRITER
TALLAHASSEE, Fla. -- State Farm, one of Florida's largest insurers, will raise property insurance rates by an average of 52.7 percent this year under a plan approved Tuesday by state regulators, giving the company a much smaller rate increase than it initially sought.
The company had filed plans in May for what would have effectively been an average increase of nearly 80 percent statewide, but the Office of Insurance Regulation balked at that proposal.
The company, which covers about one in five Florida homeowners, filed its amended plan Tuesday, and OIR officials said the numbers more closely matched what state actuaries had considered appropriate.
Insurance Commissioner Kevin McCarty acknowledged that the lower increase would be little consolation to customers.
"While this approved rate is sharply less than what had originally been filed it is still substantial, and I am deeply concerned about the effect it will have on the household budgets of Floridians, particularly those with low incomes or on fixed incomes," McCarty said in a statement released by his office.
"One of the foremost mandates of my job requires me to approve rate requests that are justified and that will provide the company the ability to pay the claims of Floridians whose homes are damaged or destroyed due to catastrophic storms, and I am confident the rate we are approving is justified under law," McCarty said.
State Farm spokesman Chris Neal said he couldn't immediately comment on the rate increase. It wasn't clear when customers will begin paying higher premiums, but the initial filing would have gone into effect Aug. 15 and state officials recently said they expected the date to remain unchanged by the amended filing.
Home insurers have been requesting large rate increases and in some cases not renewing policies in Florida following two years of heavy claims from hurricanes and fears of a more active period that have led to much higher costs of reinsurance.
The company said when it made its initial filing that the increase was needed largely because of higher reinsurance costs. Reinsurance is coverage for insurance companies, bought to back up the company should it have massive claims.
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