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Two weeks ago, Irene Hoekzema signed over her husband's June Social Security check to State Farm Insurance.
Hoekzema, 74, was shocked to see her homeowner's insurance premium had risen to $971, up 42 percent, or about $300, from last year for her manufactured home in High Point in central Hernando County. To make ends meet this month, Hoekzema dipped into the couple's special nest egg: savings for trips to visit children and grandchildren in Indiana and Texas.
Her premium was among tens of thousands of dollars State Farm legally collected before the state acted on the company's request for a statewide average 60 percent increase in rates for mobile and manufactured homes.
But the Hoekzemas could be a step closer to getting a refund, because last week the state Office of Insurance Regulation denied State Farm's request to raise rates for its 31,244 mobile home customers. State Farm has two more weeks to appeal the decision, which the company was still considering on Friday.
If State Farm decides to fight, the stakes are high for inland Hernando, Pasco and Citrus County customers, whose premiums could go up 71.4 percent under the new rates next year, according to documents filed with the Office of Insurance Regulation.
For example, a $500 premium for a manufactured home in Istachatta could cost $857 next year under the rate change, although this year State Farm would voluntarily cap all rates at a 42.5 percent increase, State Farm spokesman Tom Hagerty said.
Even if State Farm gives up on its quest for higher rates, the assault on premiums is far from over.
Allstate seeks a 20 percent average increase for its 47,676 mobile home customers in Florida.
Many mobile home owners have already been paying higher rates or were dropped by insurance companies, which started decreasing exposure to the mobile home market after the economy started to plunge.
"We're talking about people in their 60s, 70s and 80s, and an awful lot of widowers reduced to a limited income, and I'm afraid they're going to drop their insurance," said Don Hazelton, president of Largo-based Federation of Manufactured Home Owners of Florida. "If there's going to be a parade of companies seeking increases, then there's going to be a crisis."
The mobile home industry is big business along the North Suncoast, where they comprise a major portion of the housing stock: 21.4 percent of Hernando County homes, 25.2 percent in Pasco and nearly 27.7 percent in Citrus, according to the 2000 census.
In their state filings, both State Farm and Allstate said they needed to raise rates to pay for the increased cost of damage claims on mobile homes.
State Farm's average claim rose from $2,665 in January 2000 to about $3,316 in March 2003, Hagerty said. State Farm's last rate increase was in 2000.
"We are seeing an increase in the severity of our claims, and we are paying more for claims than we have in the past," Hagerty said.
Allstate was less specific on the reasons for its increase. Allstate had to withdraw its application last week because of a paperwork problem, but the company intends to resubmit the request this week. Its last rate change was in 1997.
"The rate increase requested reflects rising loss cost trends with mobile homes," Allstate spokeswoman Deb Clouser wrote in an e-mail. She could not give more details Friday.
State Farm and Allstate also raised their hurricane premiums, which they calculated through computer programs that estimated an increase in projected losses during a potential hurricane.
Basically, a high-speed computer "simulates a series of hypothetical hurricanes and estimates the resulting property losses," according to Allstate's filing. But, the computer analysis is considered a trade secret; the state regulatory agency cannot review it.
Yet, State Farm's hurricane analysis was one of the reasons the state denied the company's rate request, Florida Office of Insurance Regulation spokesman Bob Lotane said.
"There is some divergence of feeling with their use of hurricane modeling," Lotane said.
Some insurance companies said they were doing just fine. Florida Farm Bureau has recently asked the state to reduce premiums this year by an average of 8.7 percent for its 12,000 mobile home customers in Florida.
"Farm Bureau's loss experience has been reasonably in line with the premiums we're charging," said John Rollins, chief actuary with Florida Farm Bureau.
Reasonable insurance policies do exist, especially for residents in large mobile or manufactured home subdivisions where deed restrictions are in place and emergency services are more likely to be nearby.
But the choices are not as numerous as they once were, mobile home dealers and insurance agents said.
Spring Hill-based Economy Insurance Mart has typically relied on five companies for mobile home policies, but three have stopped writing new policies in Hernando County for the year, company spokeswoman Bobbie Reddin said. This year, Lloyd's of London stopped writing insurance policies for mobile homes within 12 miles of the Gulf of Mexico.
For now, some mobile home owners are just digging into their pockets to pay the increases, chalking it up to typical Florida insurance problems, said Mary Ann Dorfenkel of High Point, whose mobile home insurance premium rose to $653 this month, up 45 percent from last year, through Clarendon Insurance.
"It's like, oh well, we expected it," said Dorfenkel, treasurer of the High Point Homeowners Association.
- Jennifer Liberto covers business and development in Hernando County and can be reached at 352 848-1434 or liberto@sptimes.com