Florida Agents Seeing Effects Of Homeowners’ Rate Increases

May 21--South Florida property insurance agents say they're preparing for rate increases as state regulators approve requests to offset higher costs of water damage claims.

So far this year, the state approved a 5.5 percent statewide average increase by Federated National Insurance Co., which has the sixth-largest share of the tri-county market -- 54,469 policies at the end of 2015, according to state records.

Tower Hill secured approval for an average 13.1 percent rate increase for its Select insurance line and an average 8.2 percent increase for its Preferred line.

But several other rate increase requests are still pending review by the state Office of Insurance Regulation, including an average 2.6 percent increase on Universal Property & Casualty's personal lines policies. Of those, multi-peril residential policies, which bundle hurricane risk and other perils, would increase an average of 5 percent if approved.

Universal insured 192,808 residences, including rentals, in the tri-county area at the end of 2015, second only to state-run Citizens Property Insurance Corp., with 236,029.

Citizens, which has been warning regulators, politicians and policyholders about increasing water-damage claims and assignment-of-benefits abuses, increased its 2016 rates an average of 3.2 percent. The brunt of those increases are being felt in South Florida, including an average of 4.8 percent in Broward County and 6.2 percent in Miami-Dade County. The company is warning of even larger increases in the years to come if claims abuses are not curbed.

Olympus Insurance, which covers 14,640 homes in the tri-county area, is requesting a state average 2.7 percent increase, while Ark Royal, with 12,692 tri-county policies, is asking for a 5.1 percent average rate hike.

In South Florida, increases will generally be higher than the statewide average, depending on factors that include location and the age and condition of the insured property.

For example, Heritage Property & Casualty, which insures 96,179 homes in the tri-county region, is seeking a 14.9 percent statewide average rate increase for policies the company took out of Citizens, known as its Select program, according to filings with state regulators. But in Broward, the company is requesting approval of a 21.4 percent increase for policies in the Fort Lauderdale region and a 19.5 percent increase in other parts of the county. The insurer is seeking a 25 percent increase for policyholders in coastal regions of both counties and a 22.2 percent increase for homes in coastal Miami-Dade County, according to the filing.

Dulce Suarez-Resnick, a Miami-based insurance agent who writes coverage throughout the tri-county area, said her customers started seeing the increases in March after a three-year period in which rates declined by 3 percent to 5 percent each year.

"The range [of increases] can be as low as 6 to 7 percent to as high as 20 to 25 percent depending on the age of the home, location of the home, age of the roof, etc.," Suarez-Resnick said.

Some carriers are declining to cover certain ZIP codes or have stopped writing new policies in Miami-Dade and Broward altogether, she said. "This shrinks the marketplace and therefore the consumer is having a hard time finding competitive rates." Owners of older homes of homes east of Interstate 95, with high wind coverage rates, "are really feeling it," she said.

Dean Fulton, a Broward County agent with offices in Oakland Park and Coral Springs, said he has met with several insurance company presidents who told him to expect rate increases resulting from padded claims by water restoration companies and public adjusters.

The adjusters and contractors persuade policyholders to sign over benefits of their claims, then submit huge bills for work that far exceeds the scope of the damages, he said.

"All the CEOs [he spoke with] told me rate increases are coming," Fulton said. "It's going to go higher, and people are going to scream bloody murder."

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