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Business 2005

Ill winds continue for insurance rates

Memories of recent hurricanes and sinkholes are leading insurers to raise rates again for policyholders.

Published February 13, 2005

Hurricanes and sinkholes may seem a distant memory, but not to those seeking or renewing homeowners insurance policies in Hernando County.

Existing policyholders should expect rate increases this year, even if they have not yet been announced, local insurance agents say. New homeowners looking for new policies in the county have options, but only a few.

"It really is kind of bleak right now; I don't see any change in sight," said Diane Killingsworth of the Killingsworth Agency Inc.

Hernando County only got hit by two of the four hurricanes that swept through Florida last summer. And local damage was minimal, compared to other counties.

However, the local insurance market is complicated by ongoing sinkhole activity.

While sinkholes have always plagued the county, the rainy season of 2002 resulted in more activity than usual, which didn't surprise experts because the heavy rains followed a drought that had lasted several years. In 2004, 62 homeowners reported sinkholes to the county appraiser's office, down from 81 cases reported in 2002.

Several insurers continue to deny policies for homeowners who live near reported sinkholes, local insurers said. And a few, such as Liberty American, have stopped writing policies in the county.

"There's more than one company that really won't talk to us about opening back up (in Hernando County) because sinkholes are so prevalent," said Tom Browning of Browning Insurance Agency.

Yet, Browning added that he knows of a handful of lesser-known insurers that are still writing new policies for Hernando County besides the state-sponsored Citizens Property Insurance Corp.

By law, Citizens must insure those who cannot find coverage in the standard market, and its rates must remain higher than the market to encourage homeowners to seek other options.

For those who have insurance, rate hikes are on the way.

State Farm premiums will be increased by 5 percent across the state, spokesman Tom Hagerty said. While new policyholders will see the new rates this month, the rates for those renewing policies will take effect April 15.

Citizens has asked the state for a rate increase that would boost premiums by an average of 33 percent in Hernando County for policyholders who get their wind coverage through Citizens, spokesman Justin Glover said. The rate increase would go into effect April 1.

Evelyn Grauer of Grauer Insurance Agency said she has several clients insured through Citizens who had minor hurricane damage and who now are facing major rate increases. She also has trouble finding insurers for new policyholders.

"They've shut down Hernando County, and they're not coming back after four hurricanes," she said.

[Last modified February 8, 2005, 16:44:07]

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