Insurance Premium Hikes Leave Some Bewildered
|By Valerie Garman, The News Herald, Panama City, Fla.|
|McClatchy-Tribune Information Services|
"I have never had a claim in 17 years," said Gordanier, who was flummoxed after reading a report from the state insurance commissioner last month touting decreasing homeowners' insurance rates.
Gordanier isn't the only one to see rate increases.
The 1 million customers of the state-run
"Folks need to remember that we're still trying to catch up to rates that have been for several years below actuarially sound rates," said Citizens spokesman
An actuarially sound rate is one in which the premiums collected from customers more than offset damages paid out.
"In a lot of parts in the state we're still trying to catch up to what our actuaries say our rates should be," he said.
Florida insurance regulators approved a 6.3 percent rate hike for Citizens last fall. Under state legislation, Citizens can raise rates by no more than 10 percent per year.
Citizens provides policies for the highest risk homeowners in the state, and Peltier said the biggest rate discrepancies come from older homes on the coast.
As Citizens' rates increase, private companies are beginning to offer more competitive rates for inland homeowners, Peltier said.
"Relief is coming to coastal property owners, but it's a slower process than if you're in a less risky part of the state," Peltier said. "In coastal communities, the options available from other private carriers are more limited."
With private coverage on the decline, Citizens recently launched a clearinghouse effort to shift more policies to private companies.
The process began
"One of the reasons behind the clearinghouse is that there are decreasing private options available for property insurance at comparable policies," said Peltier, citing significant growth in Citizens policies following the 2004 and 2005 hurricane seasons, when private insurers dropped many coastal homeowners. "Lawmakers have been clear that they want Citizens to return to our role as an insurer of last resort."
At its peak in
While the clearinghouse does not affect current policyholders, Peltier said Citizens intends to expand the clearinghouse to renewal customers by the second quarter of this year.
On the private side,
"Rate increases should come to an end over the spring and summer," said Hutt, noting modest decreases already have been seen for companies that aren't as well capitalized, so they don't have the same post-storm staying power. "There's a reason they're cheaper than anybody else."
Hutt said reinsurance rates in
Hutt said shopping for homeowners insurance can often be daunting and urged customers to first research the market and shop around for the best rate.
"Consumers know the difference between a Yugo and a Cadillac; they don't know the difference between two insurance companies and their quality," Hutt said.
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