A group that insures high-risk structures on the Mississippi Gulf Coast for wind damage has filed papers requesting a 397.8 percent rate increase on private homes.
The Mississippi Windstorm Underwriting Association also is asking Insurance Commissioner George Dale to approve rate increases of 268.3 percent for commercial property and 60.4 percent for mobile homes.
The Department of Insurance contracts with its own actuaries to review and approve rates. Dale could grant the increase in full or lower the amount approved.
The request comes nearly eight months after Hurricane Katrina destroyed thousands of homes and businesses along the Gulf Coast.
The wind pool was established for people in six coastal counties who might not be able to get wind coverage on normal homeowner’s policies. Insurance companies doing business in the state can sell the wind policy, but it is overseen by the state.
“The requested rate increases are driven by the surging cost of reinsurance from the London market and Katrina’s hard lesson of how much economic loss a major storm can cause on the Mississippi Gulf Coast,” A. G. Parks, wind pool manager said in a news release.
Parks said that based on existing rates, a wind pool-insured with a masonry house south of Interstate 10 with $100,000 of coverage, a 2 percent deductible for hurricanes and a $2,500 deductible for other wind and hail loss now pays an annual premium of about $641. Under the new proposed rate, the same insured house would pay an annual premium of approximately $3,191.
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