Effective immediately, Allstate Floridian Insurance Co. has announced it will raise Florida homeowners rates 28 percent and the company plans to file a request to have the increase approved in July. State law allows companies to begin increasing rates before applying for them, but if the increase is denied, policyholders would receive refunds.
“I want to reassure Florida policyholders that Allstate’s filing will be thoroughly reviewed,” Florida Insurance Regulation Commissioner Kevin McCarty said.
The planned filing, announced late Wednesday, is necessary because of the “increasingly expensive proposition” of covering storm costs in Florida, Deb Clouser, an Allstate Floridian spokeswoman told the Bradenton Herald.
“The increases are driven by the volatility of hurricane losses and the high cost of raising capital, including the purchase of private reinsurance, to make sure Allstate Floridian can pay the high cost of hurricane claims in 2005 and beyond,” Clouser said.
Allstate officials said earlier this year that the company paid about $2 billion in claims after Hurricanes Charley, Frances, Ivan and Jeanne hit Florida last year.
Spokeswoman Valerie Beynon of the Florida Office of Insurance Regulation said the filing would cover about 640,000 policies, for homes and condo units and for the contents of rental units whose occupants have renter’s insurance.
Lawmakers passed a measure this year that calls for public hearings when rate filings are above 15 percent on average and the company’s intention to begin the increase before actually filing for it sidesteps that, said the lawmaker who crafted the legislation.
The company said earlier that because of the problem of the record four hurricanes, it wouldn’t renew 95,000 residential homeowner policies. It also won’t renew any of its 16,000 commercial policies and won’t write new ones.
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