Consumer groups are pushing for rate cuts up to 50 percent for the biggest “force-placed” insurer in Florida, arguing rates scrutinized at a Monday hearing punish struggling homeowners and are inflated by massive kickbacks to mortgage servicers.
American Security Insurance Co.’s proposed rate cut: Zero.
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Big premiums for forced-placed insurance
American Security Insurance Co. has collected billions in premiums for insurance that lenders impose when homeowners fall behind on payments or let coverage lapse. But consumer groups say the company’s loss ratios in Florida — how little it has paid out for claims compared to premiums collected — don’t justify its rates.
Year /Florida premiums/ Loss Ratio
2004 $56 million 83.8 percent
2005 $74 million 110.7 percent
2006 $116 million 29.9 percent
2007 $243 million 11.6 percent
2008 $409 million 10.9 percent
2009 $472 million 10.3 percent
2010 $521 million 13.5 percent
2011 $561 million 12.8 percent
2012 $609 million 12.1 percent
Total $3.1 billion 16.4 percent
Average loss ratio for all Florida home insurers, 2004-2012: 71. 3 percent
Source: Consumer Federation of America, Center for Economic Justice