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Insurer's rates to soar on the coast

State Farm wants its customers living near the water to bear the brunt of new proposed increases.

By TOM ZUCCO
Published May 17, 2006

Property owners in coastal areas of the Tampa Bay region who are insured by State Farm could see their premiums rise nearly twice as much as those who live inland.

State Farm, which insures about 150,000 property owners in the Tampa Bay area, most of them in Pinellas, Hillsborough and Pasco counties, said Friday it wants to raise its rates an average of 71 percent statewide. If approved by state regulators, the company plans to begin the rate hike in September.

Among the areas that would take the hardest hits are those along the Gulf of Mexico. In particular, properties west of the Intracoastal Waterway in Pinellas County would see the highest premium increase in the Tampa Bay area, at least 87 percent.

By contrast, State Farm policyholders in the remainder of Pinellas would see an increase of about 44 percent, about half as much.

State Farm policyholders in Pasco County also would see a big difference in premium increases, depending on where they live. Those along the coast would see their rates rise 27.5 percent while the remainder of the county would see an increase of 9.4 percent.

In Hillsborough County, those living close to Tampa Bay would get a 27.8 percent increase, while those inland would see a 16.8 percent increase.

While State Farm's planned rate increase will hit hard locally, it pales in comparison to the increases planned in Palm Beach County, where homeowners face an average 126.8 percent increase. Property owners in Monroe County, which includes Key West, could see a 286.4 percent increase.

Regulators approved an average 8.6 percent increase statewide for State Farm last year that is being applied this year.

In its latest rate hike request, State Farm officials blamed the past two active hurricane seasons and the high cost of purchasing reinsurance, which insurance companies buy as an extra layer of coverage to protect themselves against catastrophic losses.

Tom Zucco can be reached at zucco@sptimes.com or 893-8247.

[Last modified May 17, 2006, 06:51:09]