A policyholder facing a significant premium rate hike from an insurance company expresses concerns about potential financial strain and the possibility of relocating out of the state. However, experts suggest there might be some relief on the horizon.
Castle Key Insurance Company, among others, has proposed premium increases exceeding 50%, prompting alarm among policyholders like Stephanie Donner from Boca Raton’s Boca Pointe neighborhood. Donner reveals that her condominium insurance rate surged from approximately $800 to $1,800 per year in November, leaving her uncertain about her next steps.
“I’m depressed,” Donner, a retiree, shares. “I have to go out and get a job, even if it’s part-time… As far as moving out of the state, I have family here, so I don’t know.”
Insurance specialists highlight that Allstate, the parent company of Castle Key, submitted the premium hike request to the Florida Office of Insurance Regulation last year. While regulators recently conducted a public hearing on Castle Key’s rate increase, experts suggest that any adjustments made by regulators are likely to be minimal, if any.
Mark Friedlander, the Florida spokesperson for the Insurance Information Institute, acknowledges that although regulators could potentially issue credits to policyholders if they find discrepancies in Castle Key’s rate increase calculations, such occurrences are infrequent and unlikely.
Donner emphasizes the strain imposed by escalating premiums, expressing how every dollar she receives goes towards bills, impacting her quality of life and limiting her mobility due to financial constraints.
Friedlander points to various factors driving the surge in insurance costs, including recent hurricanes, heightened reconstruction expenses, increased rates from reinsurance companies, and a surge in lawsuits against insurance providers in Florida.
“Hurricane Ian is one of the largest loss events in U.S. insurance history for a natural disaster. More than $50 billion in insured losses is expected for Ian. When you see that level of storm activity, it’s going to drive higher rates,” Friedlander explains.
He also highlights the disproportionate share of lawsuits filed against property insurance companies in Florida, accounting for 71% of all such lawsuits in 2022, along with 15% of property insurance claims.
Despite these challenges, Friedlander offers a glimmer of hope, citing the approval of seven new insurance companies to write homeowners’ policies in Florida this year.
“Once all these companies are available, which should be in the next few months, consumers will be able to shop their coverage and get competitive quotes,” Friedlander affirms.
Castle Key Insurance Company is currently accepting public feedback until March 6 regarding the proposed rate hikes, while the Florida Office of Insurance Regulation is expected to make its final decision on the matter in due course. Meanwhile, Amica Mutual Insurance, also seeking a premium hike exceeding 50%, attributes the necessity of the increase to restoring pricing adequacy for certain policy lines, emphasizing its commitment to providing quality products and services at competitive rates.
