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Two Florida insurance companies are seeking rate hikes of over 50% over spiraling costs and surging claims.
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Florida Home Insurance Companies Seek over 50% rate increase over already record premiums
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Castle Key (a subsidiary of Allstate) and Amica Mutual Insurance had hearings with the state’s Office of Insurance Regulation (FLOIR), overseen by a Commissioner Michael Yaworsky, appointed by Governor Ron DeSantis. They lobbied for increases exceeding 50 percent arguing operating losses mount due to payouts that far exceed premiums collected.
Amica maintains that its operational losses exceed the premiums collected, leading to a reported loss ratio of 337 percent. In other words, for every dollar of premiums received, roughly $3.37 is spent on operational expenses.
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Such figures, Petraca contended, necessitate substantial rate adjustments to ensure continued coverage for Florida’s homeowners.
“About 63 percent of our policyholders will see an increase, if approved, of less than $200,” Petrarca said, noting that the company’s policy metrics indicate that the change is warranted.
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FLOIR will continue to accept public input until March 5 before making a decision.
Castle Key formally is seeking a 53.5 percent rate increase proposal for homeowners insurance policies in condominiums, which they submitted in March of last year. The FLOIR has not issued a ruling following Castle Key’s public hearing on Wednesday and will continue to accept public input until March 6.
Florida has the nation’s highest insurance premiums, with the average annual cost soaring to $6,000, significantly outpacing the national average of $1,700. The surge in premiums is attributed to challenges including inflation, excessive lawsuits, increases in fraud, and the increases of severe weather related to climate change.
As a result, it has caused escalated costs for insurers and have led to the departure of major companies like AAA and Farmers Insurance from Florida. Many Florida homeowner are now dependant on the state’s insurer of last resort, Citizens Property Insurance since private insurers are leaving the state. Citizens’ policy numbers have skyrocketed, raising concerns over its ability to fulfill future claims.
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