Gov. Charlie Crist knows a new law hasn’t cut home insurance rates as much as he and consumers had expected.
Crist said some insurance companies have not filed for rates as low as he had hoped after lawmakers changed state law in January to try to lower premiums. The law made state backup coverage for insurers more available and at a cheaper cost than what they typically pay on the private market.
Rates being charged by major home insurance companies have gone down only 10 percent since the legislation passed – not a lot compared to how much they have risen since the 2004 and 2005 hurricane seasons. Some customers saw their rates increase by more than 100 percent in the last few years.
But Crist defended the legislation. He said while rates haven’t gone down as much as he wishes they would have, they generally have fallen.
“The rates for the first time in a long time actually are coming down. Would I like it to be more? You bet I would. And do I feel a little bit of sense that maybe some of these companies have broken some of their promises? That concerns me,” he said.
Crist said the rates haven’t gone down as much as they could because of resistance from the industry.
“We need to continue to push the industry,” he said. “We need to continue to hold their feet to the fire.”
Chris Neal, a spokesman for the state’s largest private insurer, State Farm, said the company can’t simply lower rates if it means it could be caught unable to pay claims in the event of a big storm.
“Our rates are based on our risk and our predictions on future claims,” Neal said. “We need adequate premiums to cover potential hurricanes in the future. You can’t artificially reduce that risk and our rates reflect that.”
Since the law was changed, State Farm has filed for new rates that are 7 percent lower on average statewide. The filing is still in the regulatory process, however, and could change.
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