An arbitration panel has approved a statewide average increase of 54 percent for homeowners rates that Nationwide Insurance requested last year – but for many policyholders it will likely be much less because of a new law.
The increase would take effect this summer or when policies are renewed. Legislation passed in a special session in January that aims to drop premiums will lower the increase.
“They’re going to have to make a new filing that in the end is going to make this less than 54 percent,” Bob Lotane, spokesman for the state Office of Insurance Regulation, said.
The new law is expected to lower rates primarily by giving insurance companies more access to cheaper backup coverage through the state’s Hurricane Catastrophe Fund.
The arbitration panel determined that the 54 percent rate increase was “not excessive, inadequate or unfairly discriminatory,” according to its decision dated March 23.
“This approved rate helps us build a surplus and be prepared for future events,” Nationwide spokesman Eric Hardgrove said last week.
Whether the company would file a rate decrease was not immediately clear. “We’re still working with OIR to assess next steps and make sure we’re in full compliance with all recently filed Florida laws and regulations,” Hardgrove said.
The company had sought an increase in July that would have been more than 70 percent on average, saying it paid more than $1 billion in property damage claims during 2004 and 2005, when eight hurricanes affected the state. It also said its reinsurance costs had skyrocketed, forcing it to seek higher premiums.
The OIR in October said that increase wasn’t justified.
Nationwide has about 253,000 policies in Florida, with the greatest amount of policyholders in Palm Beach County, the Tampa Bay area and Orlando.
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