How much you will save is still unclear

Published January 23, 2007

Homeowners may not know for months exactly how they will benefit from the insurance plan the Florida Legislature approved Monday. But here's a look at what's known:

How much will my rates be reduced?

That varies depending on two important factors: where you live and which insurance company covers your home. Generally, customers closest to the coast who buy insurance from private insurers other than State Farm Florida are expected to see the biggest rate cut. In a few weeks, your agent may have a good idea of what your individual savings may be.

Can you give me a ballpark figure?

Estimates of average savings are 22 percent of the total premium for customers of most private insurers; 7 percent for State Farm Florida customers; and up to 9 percent for Citizens customers.

Why is State Farm so much less?

Because of the way the bill lowers the premiums. Under the new law, premiums will drop because the state will sell reinsurance, or backstop insurance, to private insurance companies at a cheaper rate than those companies can buy it on the open market.

But State Farm, Florida's largest private insurer, already pays less for its reinsurance than most private companies because it buys the coverage from its national parent company.

When will I see my rates shrink?

On policies or renewals written after June 1. If your renewal is before that, you won't see the full benefit of this legislation until your 2008 renewal.

Citizens customers should also see a more immediate benefit because the company's rates are frozen at the 2006 level under the bill. Those who have paid higher rates since Jan. 1 will get a refund.

Do I need to do anything to get the reduced rate?

No, it should be automatic upon your renewal, if it's after June 1. If you're a Citizens customer whose premium is due soon, you will have to pay the higher rate and then await a refund.

Can I lower my rate even more?

Yes, if you're willing to assume more risk. Contact your insurance agent to inquire about parts of this bill that allow you to raise your deductible, exclude coverage of household goods or drop windstorm coverage. There also are discounts for adding shutters or other improvements to your home to strengthen against hurricane damage.

I am a Citizens windstorm-only customer. How do I see about getting a Citizens policy that also includes other coverage, such as fire and theft?

You can't, yet. Lawmakers ordered Citizens to write a business plan to offer such coverage, which could provide up to 10 percent savings on your premium. But it still requires final approval, which could take a few months.

I still won't be able to afford my yearly insurance premium. Is there any help for me?

The bill requires insurers to start allowing customers to pay their premiums on a quarterly or semiannual basis. And in the regular session that begins in March, lawmakers have pledged to consider a grant program for low-income homeowners.