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Some home insurers seek rate decreases

Good news for Florida homeowners: There are signals that the cost of home insurance could at least be stabilizing, with some insurers now filing requests to reduce their rates.

Starting in July, insurance companies have filed at least nine requests for rate decreases, four of which have already been approved, according to the Florida Office of Insurance Regulation.

There were more than 20 requests to raise rates, however. Still, insurance agents say rate decrease requests are a clue that the market is balancing itself out.

The requested decreases “are a sign of positive growth,” said Jake Holehouse of St. Petersburg-based Holehouse Insurance. “We’re also seeing more players interested in the Florida market.”

In September, for example, Security First Insurance Co. filed a rate decrease affecting more than 100,000 of about 180,000 Florida policyholders, company spokeswoman Toni Harrison said.

The decrease averages 9.3 percent statewide, the company said. Policyholders should see changes as early as Oct. 15.

The news comes on the heels of a letter that Florida Chief Financial Officer Jeff Atwater sent to Kevin McCarty, the state’s insurance commissioner, and released on Tuesday.

Atwater wanted to know why property insurance costs aren’t coming down, especially now that insurers’ own cost of reinsurance – a form of insurance for insurers – has fallen.

All Florida homeowners insurance companies are required to submit an annual rate filing to the Office of Insurance Regulation, including all reinsurance costs.

Insurance companies “made representations that if reinsurance rates were to fall they would pass those savings along to their customers,” Atwater wrote. “But now that insurance companies are experiencing a significant decrease in the cost of their reinsurance, they are not lowering rates for consumers.”

Atwater asked for an analysis of the state’s insurance market on his desk by Dec. 18. McCarty responded that the analysis was underway.

Earlier this year, McCarty said in a letter to Atwater that “there has not been enough time for most insurance companies to reflect any decreases in (reinsurance costs in their) insurance premiums.” He also said that the cost of reinsurance from one source, the Florida Hurricane Catastrophe Fund, actually has gone up.

Further, as Harrison explained, whether a company lowers rates depends not just on lower reinsurance costs, but other costs of doing business.

“If the overall costs are lower, then the company could file a rate decrease,” she said. “The cost savings for each company will vary because not all companies purchase the same amount of reinsurance.”

Companies, such as Security First, that purchase reinsurance coverage for multiple storms will most likely experience greater cost-savings, Harrison added.

Reinsurance costs aren’t so much an issue for Citizens Property Insurance Corp., the not-for-profit government corporation. Citizens has 270,000 customers in Hillsborough, Pinellas and Pasco counties.

“We included lower reinsurance costs in our calculation for 2014 rates,” said Citizens spokesman Michael Peltier, “but because Citizens’ overall rates remain inadequate – especially in the coastal regions – those reinsurance reductions do not result in lower premiums across the board,”

Copyright © 2013 the Tampa Tribune (Tampa, Fla.), James L. Rosica. Distributed by MCT Information Services.

Buying tips

Buying Tip: when I show property to clients one of the 1st things I look at when we arrive is the roof! In today’s market where insurance in Florida is so hard to obtain and expensive. A newer roof can save you hundreds of dollars a year.

If you buy a home with a new or newer (2002 on) it should have been in stalled with new nails and maybe special clips and a secondary waterproof barrier.

The second reason I look at the roof is quite often homes build in the 60’s and 70’s had tile roofs. Looking at the homes in the area if you see 50% of them have shingle roofs it could be a strong indication that the roof is at the end of its life. If that’s the case you maybe unable to get insurance. Insurance companies want to see at leased 3 years of life remaining.