Insurance rates may drop

[Aquawind]

10 to 50 percent reduction possible, state calculations show

By Paige St. John, news-press.com Tallahassee bureau
Jacob Ogles, jogles@news-press.com
Originally posted on March 02, 2007

TALLAHASSEE — Starting in June, insurance rates in Florida could drop from 10 to even 50 percent — the trade-off for Floridians shouldering a much greater share of hurricane losses.

The reductions come from calculations released Thursday by Florida regulators. Gov. Charlie Crist called them “very encouraging.”

“The good work the Legislature did in special session is already having a very positive impact,” he said.

But some homeowners greeted the news with skepticism.

“When your insurance rates jump up 300 percent, then that 24 or 27 percent saving is not a big break, is it?” said Ray Ozmon of Naples.

Example savings calculated by regulators range from 27 to 39 percent in Lee and Collier counties; 22 to 28 percent in coastal Escambia and Santa Rosa counties; 10 percent in Leon and Wakulla counties; 23 to 32 percent in Brevard County, and 10 percent of the total bill in inland counties.

Mobile-home residents will see slightly higher reductions and condominium-unit residents slightly less.

The final impact to individual home bills will vary widely from area to area and from company to company.

In cases where insurers such as State Farm have large rate increases in progress, Insurance Commissioner Kevin McCarty said, the bills that go out after June will still show a rate increase, although a smaller one.

“This is not a one-size-fits- all,” he said.

They reflect the expected cost savings to insurance companies for buying their backup coverage at cost, from the state, instead of from profit-driven private re-insurers.

Cape Coral homeowner Joe Fasiska said the 27 to 39 percent savings will be appreciated in his home. “I would be satisfied with that,” he said.

Fasiska said his rates have more than doubled, from $91 to $209 monthly payments.

The savings regulators are talking about can relieve a lot of strain on his budget.

“It will be a great benefit,” he said. “That will pay for groceries.”

Ozmon was more skeptical, and said the adjustment still doesn’t fix the root problems causing insurance rates to skyrocket. His own home insurance costs have jumped from roughly $1,200 per year to more than $2,500 per year in the last few years.

“This is taking a lot of wear and tear on my psyche,” he said.

According to Ozmon, the root problem is insurers being allowed to let subsidiaries go out of business and forcing insurers to desperately shop around for new providers or turn to Citizens Property Insurance, the state-backed insurer of last resort.

The $12 billion expansion of the Florida Hurricane Catastrophe Fund allows Florida to stash away its residents’ premiums for future hurricane claims. But if large storms wipe out the fund and trigger statewide policy assessments to bail it out, it also has the effect of using everyone’s money to subsidize coastal development.

Consumer advocate Bob Hunter, hired by the state to help calculate the savings, heralded Florida for “brilliant action.”

“This is the right way to go and will in the long run save a lot of money for Florida,” he said.

Insurers are not convinced.

“To really deliver a meaningful solution in Florida, we must move beyond band-aid measures to a more balanced, long-lasting approach,” said William Stander, lobbyist for the Property Casualty Insurers Association of Florida.

Companies are required by legislation passed in January to incorporate that savings in new rates to be filed by March 15. Regulators will require insurers to make a second “true-up” filing by September to reflect greater or smaller savings.

The March filings also will release insurers from a temporary freeze on policy cancellations and rate increases. Although insurers are legally able to continue those cancellations where they left off, regulators say most companies have promised to send out new 100-day notices of cancellation.

http://www.news-press.com/apps/pbcs.dll ... 01085/1075

WooHooo! That is a change of pace. 50% is a lot of money!

[Lindaloo]

Don't tell Alladin, he may want everyone's insurance increased 100% so he can have cheaper insurance. lol.

[gtalum]

I only hope we don't regret the legislature's decision. It's certainly great for the short-term, but I fear what happens when Florida gets a Katrina-magnitude disaster and the taxpayers have to pick up the tab. The new law limits insurance companies' liability to I think $25 Billion per storm. Florida's total budget this year is about $74 Billion. If A $75 Billion storm hits, then the state will have to come up with $50 Billion to pay for it. Where's the money going to come from?

[Aquawind]

Insurance rates should be lower
Originally posted on March 14, 2007

http://www.news-press.com/apps/pbcs.dll ... 7703140393

We are not thrilled that insurers plan to reduce hurricane insurance rates at less than the percentages Floridians were led to expect.

Gov. Charlie Crist calls it good enough — "I'm not going to complain about rates going down," he said — because companies, such as Allstate and Nationwide, plan to lower them a little.

They should lower them a lot in light of skyrocketing premiums over the last two years, multimillion-dollar profits in 2006 when no hurricanes hit us and incentives approved by the Florida Legislature in January to place more of the risk on taxpayers.

We learned Monday that Allstate plans to drop rates by 14 percent, less than the 24.3 percent calculated by regulators, and Nationwide's drop is in single-digit percentages.

Earlier this month, though, state regulators gave Floridians hope that rates could drop from 10 percent to 50 percent in June.

Insurers and the state have been battling over what the new insurance law really means, and it seems the companies have been successful at getting their way. The state recently gave them the green light to drop some customers before June as long as they were notified in advance.

The law gave no relief to condominium or business owners.

In a recent story in The News-Press, Ray Ozmon, of Naples, was skeptical about a rate drop: "When your insurance rates jump up 300 percent, then that 24 or 27 percent saving is not a big break, is it?" he said.

He has a good point, and the outlook seems worse than he thought.

That means the Legislature's work is not finished because Floridians are still looking for real relief.

Now — during the current regular legislative session — is as good a time as any to continue the work.