Written by Dave Heller
TALLAHASSEE, Fla. — Two affiliates of Allstate Insurance Company want to raise their property insurance rates in Florida
more than 30 percent.
On Tuesday, executives of Castle Key Insurance Company and Castle Key Indemnity Company raised their rights hands and promised to tell the truth in a hearing before state regulators.
The companies are asking the Office of Insurance Regulation for rate hikes averaging between 31 percent and 36 percent statewide. However, individual customers could see premium increases up to 68 percent.
Castle Key executive Bonnie Gill says the company has posted underwriting losses every year since 2006 even though Florida has not been hit by a hurricane.
Gill says Castle Key must shore up its surplus fund, and buy more reinsurance, so it can cover all claims when the next hurricane strikes.
“With surplus levels dropping and Florida Hurricane Cat Fund shrinking, Castle Key has an increasing reliance on privately placed reinsurance and its strategy to make sure all of its customers’ hurricane losses are covered. But this must be financially supported.”
The two Castle Key companies have about 265,000 policies across Florida. Gill says the rate hike requests are actually less than what the company could justify actuarially.
“Our rate change request does not fully compensate for the risk of writing business in Florida given what we could earn with other investments of far less risk. But we appreciate the challenges that high average premiums present to homeowners and we have not asked for all the rate increase that we could actuarially support.”
Belinda Miller of the Florida Office of Insurance Regulation says the agency will look at the rate increase requests closely and make sure any increases are justified.
“It’s not in the public’s interest to keep rates artificially low because then you end up with an insolvent company and nobody wants that. But on the other hand you don’t want a company that’s making extraordinary profits and it’s because their rates are too high. So it is a balance and it is a constant balance.”
A decision is expected within a couple of weeks.
Call us at 813-712-4117 to see if you’re paying too much for homeowners insurance.