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Another insurer to drop policies

Nationwide, which recently raised premiums, won't renew about 40,000 policies for Florida homeowners.

By JEFF HARRINGTON
Published September 1, 2005


Not all Nationwide Insurance homeowners in Florida have to worry about a round of rate hikes going into effect starting this month.

Thousands won't be renewed at all.

Beginning March 1, Nationwide will not renew about 35,000 homeowners' and 4,800 mobile home policies across the state, the Columbus, Ohio, company said Wednesday. It also will no longer write mobile home policies starting today and won't renew about 12,000 commercial policies (mainly condominiums, apartments and rentals) starting March 1.

After the cutback, the fourth-biggest property insurer in Florida will continue to carry about 570,000 policies in Florida, including 240,000 homeowners' policies.

"It has become increasingly apparent that we are not comfortable with our current exposure in the Florida property market," Jeff Rommel, the company's regional vice president of Florida operations, said in a statement.

"While these are difficult decisions, we have an obligation to act in a responsible and thoughtful manner to ensure long-term stability for Nationwide policyholders in Florida and across the country."

The news wasn't a surprise.

Last month, Nationwide said it would stop writing new homeowners' policies across Florida starting this month and said it was considering more drastic measures, including nonrenewals in the state.

The local fallout includes dropping almost 9,800 Nationwide policyholders in Pinellas, Hillsborough, Pasco, Citrus and Hernando counties. Of those, 8,233 are in Pinellas, meaning more than a third of Nationwide's policies in the county will not be renewed.

The Florida pullback is the latest fallout from last year's four-hurricane barrage.

More than a half-dozen companies have left the state or stopped writing policies since hurricanes Charley, Frances, Ivan and Jeanne caused a combined $22-billion in insured damages. Among them: Safeco Insurance, which told the state last month it would not write new policies and, beginning in 2006, would stop renewing customers. Allstate also has decided not to renew 95,000 policies.

In July, Nationwide won approval to raise rates an average of 21 percent on homeowners' policies and 25 percent for mobile homes.

In the bay area: Pinellas County homeowners insured by Nationwide face an average 29 percent increase in premiums; Hillsborough, 16.3 percent; Pasco, 28.9 percent; Hernando, 22.8 percent; and Citrus, 3.8 percent.

The biggest insurers, State Farm and Allstate, have not written homeowners' policies in high-risk, coastal areas of the state for years.

Increasingly, the only choice for property owners seeking coverage is one of the many startup insurers with a limited track record for handling claims or the state-run Citizens Property Insurance, which covers those who cannot find property insurance on the open market. Citizens has swelled into the second-largest insurer in Florida. By state law, its premiums are supposed to be higher than the market average as a disincentive to be used by homeowners as an easy fallback.

Information from Times files was used in this report. Jeff Harrington can be reached at 813 226-3407 or harrington@sptimes.com