When annuity marketing material needs a little embellishment, that can be a big problem in court.
April 17--The FAIR Plan has filed a proposal with the state Division of Insurance to raise homeowners insurance rates by an average of 6.8 percent statewide.
But the Cape and Islands and New Bedford would be hit with the highest overall rate increase -- 9.9 percent -- the highest allowed under the proposal, said Robert Tommasino, general counsel for the FAIR Plan.
Without the cap, the insurance association's formula called for a 13.3 percent rate increase on the Cape, Tommasino said.
The last FAIR Plan increase was in 2006, when homeowners insurance rates jumped 25 percent on the Cape and Islands.
The FAIR Plan, formally known as the Massachusetts Property Insurance Underwriting Association, sought a 6.7 percent rate increase on the Cape and Islands and 7.2 percent statewide last year. That request was dismissed by Joseph G. Murphy, commissioner of the Division of Insurance.
Tommasino said it would provide more detailed information this year in seeking the increase.
The FAIR Plan is often considered the insurance of last resort. About 55,000 households on the Cape and Island are insured under the plan, Tommasino said.
The insurance association administration said the Cape would witness higher rate hikes than inland areas partly due to hurricane models.
"Hurricane models are predicting there would be more significant losses on Cape Cod than, say, other parts of the state," Tommasino said. He also pointed to higher reinsurance rates on the Cape. Reinsurance companies insure the insurance companies.
Paula Aschettino, chairwoman of the Cape-based Citizens for Homeowners Insurance Reform, called the rate increase request "outrageous."
"I can't believe they aren't coming in with a reduction," she said, arguing the hurricane prediction models don't use state-specific data.
"I really think the Cape and Islands falsely paying extra money based on predictions of events that have no correlation at all with reality," she said.
The state insurance division typically schedules a public hearing on the rate requests within 30 days of the filing, Tommasino said. The FAIR Plan filed the request April 12.
Aschettino and a busload of Cape residents opposed to the rate hike took a bus to Boston last year to protest. They will return this year too, she said.
"I am very concerned about this increase again, an unjustified increase," she said.
(c)2013 the Cape Cod Times (Hyannis, Mass.)
Visit the Cape Cod Times (Hyannis, Mass.) at www.capecodonline.com
Distributed by MCT Information Services