Talk of the bay
Homeowners insurance to rise slightly, except in Florida
By JEFF HARRINGTON
Published February 7, 2005
Insurance premiums nationally are expected to go up a palatable 2.7 percent this year, the lowest jump since 1999 and far removed from the double-digit jumps of a few years ago.
Great news. Except, that is, if you happen to live in hurricane-prone Florida, where rate hikes are expected to be a wee bit steeper.
So says the Insurance Information Institute's annual Groundhog Forecast.
Every February, the institute invites insurance industry analysts and other observers to poke their heads out of the ground and, in the spirit of Punxsutawney Phil, predict how chilly the insurance climate will be.
This year's Groundhog Forecast of a 2.7 percent increase includes all property and casualty insurance, including workers' compensation and auto. That would be a welcome reprieve after average rate increases of 14.6 percent in 2002, 9.8 percent in 2003 and 4.3 percent last year.
Homeowners insurance, alone, is expected to rise 2.5 percent, with any upward pressure on the average coming courtesy of Florida.
"In Florida, you could expect it will be substantially higher based on the magnitude of the rate increases filed by insurers so far," said Bob Hartwig, the insurance institute's chief economist.
Brushing aside a state push to freeze rates, Hartwig said Florida consumers have no choice but to accept substantial rate increases if they want to keep the insurance market intact after a four-hurricane year.
"We're trying to solve a major problem," he said, contending higher rates are needed to rebuild reserves and pay for more costly reinsurance. "Florida cannot count on insurers to continue to throw good money after bad."
[Last modified February 4, 2005, 19:28:01]
[an error occurred while processing this directive]