A Florida insurer hopes to raise rates on certain home insurance policies by nearly one-third as it grapples with the impacts of the recent hurricane season and other market developments.
At a June 17 hearing with the state’s Office of Insurance Regulation (OIR), Trusted Resource Underwriters Exchange (TRUE) requested permission to raise rates on its multiperil homeowners’ insurance policies by 31.5 percent.
Newsweek has reached out to TRUE via email for comment.
Why It Matters
Florida’s property insurance rates are already among the highest in the nation, and the increase would be one of the largest in recent years and impact hundreds of homeowners. However, the insurer has argued that even a 31 percent increase is well below that needed to cover recent changes in the Florida insurance market, and the impacts of hurricanes and reinsurance costs.
What To Know
According to details unveiled during Tuesday’s hearing, TRUE holds nearly 5,000 policies that would be impacted by the requested rate change. The company’s own analysis said that it would need to enact a 59.7 percent rate hike on these in order to keep up with recent developments in the home insurance market, nearly double the requested increase. The current average annual premium for those on the policy is $4,309, set to increase to about $5,660 if approved.
According to The Palm Beach Post, TRUE’s request is the first of Florida’s 87 property insurance companies to pass the 15-percent threshold that mandates a hearing with the OIR.
Florida has long stood out as one of the states with the highest homeowner insurance rates in the country, owing largely to the frequency of hurricanes, tropical storms and flooding in the state. According to financial analysis firm Bankrate, the average premium for a $300,000 home is $5,409, more than double the national average of $2,341, and reaching as high as $8,397 in West Palm Beach.
Analysis of recent property insurance data from Florida’s OIR by The Insurance Journal found that, since the fourth quarter of 2022, average premiums have risen by 34 percent, while the number of policies in force has climbed by around only 4 percent.
What People Are Saying
TRUE CEO Anthony Scavongelli, during Tuesday’s hearing, said that TRUE’s own analysis “indicated support for a nearly 60-percent rate increase, driven largely by hurricane and reinsurance costs. We chose to file for only half of that indication.”
He added that the company was operating in “a very difficult market, made worse by inflation and reinsurance costs,” and that it would “consistently assess our rate plan in the market conditions in which we find ourselves.”
Paul Handerhan, president of the Federal Association for Insurance Reform, told The Insurance Journal that premium increases in Florida “are largely being driven by inflation in construction replacement costs and increases in reinsurance costs and/or the required reinsurance capacity needed to mitigate against solvency risks.”
What Happens Next?
State regulators will decide on whether to approve TRUE’s rate increase request after the comment period closes on July 1, a spokesperson for the Florida OIR told The Palm Beach Post.
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