Florida home rate increases to top 8 percent

October 2, 2012 Filed under FLORIDA Posted by dteditor

By Doreen Hemlock, SunSentinel.com – State regulators have approved rate increases topping 8 percent for two more home insurers: Universal and Allstate.

That’s after a 6 percent increase on home insurance policies for State Farm and another hike expected this week for state-backed Citizens Property Insurance, Florida’s largest home insurer.

Universal, the state’s second-largest insurer of homes, was granted an average 23 percent rate increase, bringing the average cost for its homeowner policies to $2,170, said the Office of Insurance Regulation.

Allstate’s Castle Key Insurance received an average 14.9 percent increase, and its Castle Key Indemnity an average 8.2 percent increase, bringing their average policy premiums to about $1,400 a year. Allstate’s units combined rank as the state’s No. 4 insurer after State Farm, Florida data shows.

Amounts paid on individual policies vary widely from the average. South Florida homeowners generally pay more because of higher hurricane risk than other parts of the state, experts say.

Increases also vary based on type of policy. For example, Castle Key Insurance was granted a 12.9 increase on insurance for homes and a 34.1 percent raise on policies for condominiums.

Insurers say increases are needed, because companies are paying out more in claims and expenses than they take in from premiums. One reason: rising costs for re-insurance, the insurance that the companies buy from global firms.

Re-insurers are charging more after costly disasters worldwide, such has last year’s tsunami in Japan, according to the Insurance Information Institute, an industry trade group.