BRADENTON – Despite years of relatively mild Hurricane seasons, Florida property insurance rates have continued to climb. An AP report shows that Florida's Office of Insurance Regulation has been approving more than 100 rate hike requests per year since 2009. Homeowners, insurance companies and consumer advocates continue to be at odds on what is causing the strange market dynamic.
For the last seven years, Florida has been spared major storm damage like the kind that ravaged the state in 2004 and 2005. Still, insurance rates have steadily risen for homeowners. Predictions for this year call for an active hurricane season with as many as 20 named storms, leaving homeowners frightful of what would happen if insurance companies actually were hit with expensive claims.
Insurance companies are regulated by the state and must have rate hikes approved. However, the biggest "expense" is the cost of "reinsurance" a form of insurance for the insurance company to offset major claims. Many of these shadowy companies are located offshore, in countries where little to no public information is available. Some are actually owned by the insurance companies they re-insure, providing a method for them to ratchet up "expenses" that they are effectively paying to themselves, which was the subject of a Pulitzer Prize-winning investigative series in the Sarasota Herald Tribune in 2010.
Some analysts say that this season could prove crucial to rates in future years, as another storm season might close out the cycle of rising prices. Florida residents will be anxiously hoping for another soft-season, though it's unlikely that they'll be holding their breath in terms of rate decreases.
No comments on this item
Only paid subscribers can comment
Please log in to comment by clicking here.