By a long shot, Floridians pay more to insure their homes than folks in any other state — an average of $1,933, double the national average of $978, the latest figures show. Louisiana is No. 2 at $1,672.
Florida insurance commissioner Kevin McCarty has asked for more time to tell Chief Financial Officer Jeff Atwater why rates have generally not come down despite eight years without a major storm and a fall in key costs for insurers. McCarty asked to postpone to Jan. 14 a report that had been scheduled for release Wednesday.
“While we recognize the need for a prompt response, I would like to suggest an extension of time for the completion of the report to permit the inclusion of additional data points and company rate filings,” McCarty wrote in a letter to Atwater.
Atwater agreed to a delay, a spokesman said Wednesday, but remains “concerned that property insurance companies are not passing along the reinsurance cost savings they are experiencing to Florida homeowners.”
In August, the CFO with North Palm Beach roots asked the insurance chief why millions of residents are not seeing lower property insurance bills even as reinsurance rates are falling 15 percent to 20 percent.
Reinsurance is back-up coverage companies buy to help cover claims if disaster strikes, and for many years it has been the top justification to raise consumer rates in Florida. It can account for 40 percent or more of the bill the homeowner pays.
“Floridians not only deserve an explanation for why they have not seen any savings to date, they also deserve to quickly begin seeing property insurance savings in their bills,” Atwater told McCarty.
Industry groups have argued Florida’s rates reflect its high hurricane risks. In many cases, they say, insurers are buying more reinsurance protection but not spending less money overall to do so, so rates should not necessarily go down.
“Simply, Florida is No. 1 for the cost of homeowners insurance because the state is No. 1 for claims payouts for hurricane losses,” said Lynne McChristian, Florida representative for the Insurance Information Institute. “This remains true despite eight years without a storm.”
Over a 20-year period, Florida accounted for more than 15 percent of claims paid out for natural disasters, with estimated property losses of $65.6 billion., McChristian said. Texas is second at almost 11 percent and Louisiana is third at more than 9 percent. Combined, these three states account for more than a third of all estimated property losses over the past 20 years, and that’s why the rates are highest in those states, she said.
As of last week, Florida insurance officials said three insurers have filed for decreases in 2014. More than 170 carriers write property insurance in Florida, according to a state database.
Security First of Ormond Beach was approved for a decrease of 9.2 percent.
ASI Group of St. Petersburg, which includes ACA Home Insurance Corp. American Strategic Insurance Corp. ASI Assurance Corp. and ASI Preferred Insurance Corp., was approved for a drop of 7.8 percent.
Universal Property & Casualty Insurance Co. of Fort Lauderdale, under fire for questionable claims practices reported by The Palm Beach Post amid increasing profits at its parent firm, filed for a rate decrease of 2.3 percent. Regulators ordered a decrease of 2.4 percent.
Universal, with more than 500,000 customers, is the state’s largest insurer after state-run Citizens, which has about 1.1 million. Universal’s biggest market is Palm Beach County, where it has more than 60,000 customers, slightly more than in Broward County.
Numbers that show Florida leading the pack in insurance costs were released this week by the National Association of Insurance Commissioners, based on 2011 data from the states. Even with some time lag involved, there is little reason to think Florida’s lead has changed significantly in the meantime. Virtually all Florida insurers have been filing for annual rate increases since then, and only late this year have a handful begun to ask for decreases in 2014.
Homeowner advocates want to know why if a few carriers can cut rates, more cannot do so too.
“It’s a very small step at this point, but it’s definitely a movement in the direction we’d like to go,” said Steve Burgess, the state’s insurance consumer advocate.
Home insurance premiums
1. Florida $1,933
2. Louisiana $1,672
3. Texas $1,578
4. Mississippi $1,409
5. Oklahoma $1,386
6. Alabama $1,163
National average: $978
Source: National Association of Insurance Commissioners. Denotes average annual premiums for the most common home policy, HO3, based on 2011 data.