From the S. Florida Sun-Sentinel (Fort Lauderdale paper), April '06: FYI.
Four more insurers that cover thousands of South Floridians' homes want to charge much higher rates, and one of them intends to nearly double customer premiums.
Florida Peninsula Insurance Co., United Property & Casualty Insurance Corp., Hanover American Insurance Co. and Amica Mutual Insurance Co. all asked state insurance regulators over the weekend for substantial rate increases.
Boca Raton-based Florida Peninsula Insurance Co. asked for the highest, seeking permission to increase windstorm premiums by a statewide average of 81.4 percent for single-family homes and 76.6 percent for condominium policyholders. The year-old insurer, which only covers the wind portion of homeowner policies, took 85,530 coastal customers' policies from state-backed Citizens Property Insurance Corp.
United Property & Casualty Insurance of St. Petersburg asked for a 35.5 percent statewide average increase, though some South Florida homeowners could see much higher increases. The company insures more than 36,000 policies in Broward, Palm Beach and Miami-Dade counties.
Both Florida Peninsula Insurance and United Property & Casualty cited spiraling costs for reinsurance -- insurance coverage for insurance companies -- as the driving force behind higher rates.
"The reinsurance market is in a panic because of the storms of the last couple of years," said Mel Russell, senior vice president for underwriting, marketing and product development for United Property & Casualty.
Reinsurance companies aren't sure how much capacity they'll have to cover insurers' claims after a catastrophe, and many insurers aren't even sure what prices they'll have to pay or how much coverage they'll be able to get.
Russell said his company was told to expect to pay at least 40 percent more for reinsurance, once they finalize their contracts in June. And those costs will be passed down to customers.
"The market is very volatile right now," Russell said. "... Ultimately it's going to hit everybody right in the pocketbook, because it's starting from the top down."
United Property also is holding off on selling new policies, until its reinsurance contracts are settled, Russell said.
Florida Peninsula's chief executive officer, Roger L. Desjadon, said his company's higher premiums were directly related to higher reinsurance costs.
Florida's insurance market is largely dependent on reinsurance, and the next few months will be critical, said Insurance Commissioner Kevin McCarty.
Some reinsurers are holding back on doing more business in Florida because of recent hurricanes and losses here, coupled with a decision by rating company A.M. Best to boost capital requirements for reinsurers, McCarty said.
All this means it is tougher for Floridians to get a new insurance policy from a company other than Citizens, and existing customers with private companies will pay more for their policies.
Should more hurricanes hit Florida this year, it could create even more problems for the fragile market.
"Two years of storms back to back, it's amazing the resiliency of the market," McCarty said. "I don't know how much more we can sustain."
).
Is that for real? :scratch: Seems like it would help hazard insurance rates, not wind.
