Windstorm rate increase upheld; Nelson to appeal

By JEFF HARRINGTON

© St. Petersburg Times, published June 17, 2000

A judge signed off Friday on a plan to charge coastal homeowners in Florida an average 96 percent more for windstorm insurance, just two weeks before the increases are to take effect.

The higher rates were approved in February by a three-member arbitration panel, but Florida Insurance Commissioner Bill Nelson sued to stop them. Nelson, whose office rejected the rate increase last year, argued that the arbitration panel had taken too long to act on an appeal.

In a ruling released Friday, Circuit Judge Nikki Ann Clark in Tallahassee said the allegations raised by Nelson's staff "simply do not rise to the level of blatant abuse" of the arbitration process.

The arbitration panel's decision is valid "and however disappointing it may be, the parties must abide by it," the judge wrote.

The Florida Windstorm Underwriting Association, the state-run group that provides the mandated wind insurance to 450,000 coastal homeowners, applauded the news. "This . . . substantiates our theory all along that we had the right rate decision and it was final," spokesman Ron Natherson said.

Nelson's office, though, isn't ready to give up the fight.

"We'll certainly file an appeal just as quickly as we possibly can," said Don Pride, a department spokesman. "It's our feeling we still have not gotten a hearing on the merits of our case."

At the same time, Nelson's office is preparing an administrative order to prevent the wind pool from sending notices about the July 1 start-up of the higher rates until the legal spat is resolved. Pride said the windstorm association already has notified some people over the objection of regulators.

Most of the storm-prone homes covered by the wind pool are in South Florida. The bay area accounts for fewer than 15,000 policies: 9,863 in Pinellas, 4,353 in Pasco and 726 in Hernando. Homeowners in Citrus and Hillsborough counties are not part of the program.

The changes could add up to $1,200 annually to the cost of insurance, though the increase could be greatly reduced if homeowners install storm shutters and take other steps to improve their home's durability. Using new credits for hurricane-proofing, some policyholders will see their rates drop, Natherson said.

The higher rates are being phased in, with no more than a 20 percent increase in the first year, 30 percent the second year and 40 percent in subsequent years.

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