Nationwide wants 10% hike in Florida insurance rates
Dec 3, 2008
South Florida Sun-Sentinel–December 2, 2008
By Julie Patel
Nationwide Insurance Co. of Florida wants to raise residential property insurance prices by a statewide average of 10 percent.
The increase is needed primarily to beef up reserves to pay for non-hurricane weather damage, including sinkhole claims, Nationwide spokeswoman Nancy Smeltzer said Monday.
Nationwide, the state’s fourth-biggest private insurer of homes, reduced rates by a statewide average of 20 percent last year after increasing them by an average of 54 percent.
“It’s part of what we have to do to make sure we’re here for customers when they need us most,” Smeltzer said, adding that increased construction costs also are driving up the cost of claims. “It’s the real cost of serving customers based in a very challenging market.”
Despite Florida’s third hurricane-free storm season in a row, some property insurers are still asking to raise rates. State Farm, Florida’s largest private insurer of homes, is waiting for a ruling by an administrative law judge on its proposed 47 percent average statewide increase.
The state’s Office of Insurance Regulation is reviewing Nationwide’s proposal but has already approved average rate increases that range from 2 percent to 20 percent for 12 smaller insurers, including some mobile home insurers.State regulators also approved decreases that will take effect next year of anywhere from 1 percent to 9 percent for 12 insurers . That includes a decrease for Allstate Floridian customers as part of an agreement the company struck with the state in August.
Nationwide’s proposed increase for individual customers varies by factors such as where they live. The company has capped the rate boost at 15 percent for hurricane and non-hurricane premiums and 25 percent for sinkhole premiums to “minimize the impact,” Smeltzer said. Some customers could save money by dropping sinkhole coverage, she said.
Nationwide, which hasn’t sold any new homeowner insurance policies since 2005, has about 130,000 policies statewide, including 9,000 in Broward and 16,500 in Palm Beach County.