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Letter to the editor

Lower insurance rates elusive

A state regulator vows homeowners will eventually see reductions.

By TOM ZUCCO, Times Staff Writer
Published January 9, 2008

Florida homeowners really will see their property insurance rates come down as a result of laws passed last January, a key state regulator assured the Senate Committee on Banking and Insurance in Tallahassee on Tuesday.

Exactly when some homeowners will see those reductions, however, remains uncertain.

"The vast majority of companies have dropped their rates," deputy insurance commissioner Belinda Miller told committee members, "and a few companies that haven't we are litigating against."

But by the state's own count, it's more than a few. As of last week, 31 insurance companies representing nearly a third of the Florida market, or about 1.3-million policyholders, have asked for a rate hike. Those rate increases have been denied, and the companies, which include Allstate and USAA, are in various stages of appealing the decisions.

Only 32 insurers - mostly smaller companies representing about 17 percent of the market - have cut their rates. But the savings are substantial, an average of about 22 percent.

An additional 24 companies that represent about 46 percent of the market have requests that are pending. Regulators said most of those requests are for lower rates and are likely to be approved by the end of February.

The number of companies still holding out for higher rates, already a target of Gov. Charlie Crist, also drew the attention of several committee members, including Sen. Don Gaetz, R-Niceville, Sen. Ted Deutch, D-Delray Beach, and Sen. Jeff Atwater, R-North Palm Beach. The senators said they want to talk to insurance executives and find out why major insurers like Allstate and USAA balked at lowering their rates.

"I think we owe it to everybody to take these arguments apart one by one," Atwater said.

The good news for many policyholders is that until any rate request is resolved, an insurance company must use its initial filing, which in most cases means a reduction.

Allstate, for instance, initially said it would cut its rates 14.2 percent, but later asked for a 42 percent increase. The request was denied, and while Allstate appeals, it must use the 14.2 percent reduction.

Because of a number of factors, it could take months before some homeowners see lower insurance bills.

"This is the first year we have received a preponderance of rate reductions," said Office of Insurance Regulation spokesman Tom Zutell. "We've gotten hundreds of filings for rate reductions, and we've already got 17 percent of the market buttoned down at a 22 percent decrease. That segment will get larger as we process more and more pending requests.

"And," he said, "we're trying to do that as fast as we can."

Times staff writer Jennifer Liberto contributed to this report. Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

[Last modified January 8, 2008, 22:52:17]