Claims for roof damage. Prosecutions. Reinsurance costs.
For tens of thousands of homeowners, those issues could lead to big increases in property insurance rates if state regulators approve proposals on Tuesday.
The Florida Office of Insurance Regulation held three hearings as it evaluates rate proposals from Kin Interninsurance Network, First Floridian Auto and Home Insurance Co. and Florida Farm Bureau General Insurance Co. and Florida Farm Bureau Casualty Insurance Co.
The Farm Bureau companies are seeking an average rate increase of 48.7% statewide, while Kin is seeking an average increase of 25.1% and First Floridian is seeking an average increase of 23%.
The proposals are the latest evidence of problems in the state property insurance system, as lawmakers prepare to return to Tallahassee next week for a special session to try to shore up the market.
The hearings also provided insight into some of the issues that are likely to be important during the session, including calls from insurers to deal with large numbers of roof damage claims and lawsuits that companies say are driving up costs. costs.
Angel Conlin, CEO of Kin, told regulators that his firm sees legal costs as the “ultimate driver” that needs to be addressed during the session.
“We believe the real solution is to address litigation issues,” Conlin said.
Another issue affecting rates is the rising cost of reinsurance, which is essential relief coverage that insurers buy to help with things like hurricane claims.
Along with the rate increase proposals, Tuesday’s hearings also provided insight into steps insurers have taken to try to limit financial losses, including dropping customers who have older roofs on their homes. This stems from what companies say has been an increase in recent years in roof damage claims and higher repair costs.
Farm Bureau, for example, has decided not to renew policies for homeowners who have shingle roofs at least 20 years old and tile roofs at least 25 years old, the president and CEO said. Steven Murray. This will ultimately result in approximately 7,600 customers losing coverage.
Kin plans to be even stricter, limiting coverage to homes with shingle roofs for up to 10 years and metal and tile roofs for up to 20 years – a move that will result in the non-renewal of approximately 5,000 policies, said Dan Ajun, the insurer’s chief. actuary.
Governor Ron DeSantis called the special session, which begins Monday, after the House and Senate failed to reach agreement on a property insurance bill during this year’s regular session. In recent months, three property insurers have been placed in receivership and declared insolvent, while a group of affiliates – FedNat Insurance Co., Maison Insurance Co. and Monarch National Insurance Co. – reached a settlement with regulators on Friday. which will lead to 68,200 policies being cancelled.
Meanwhile, other insurers abandoned customers, stopped writing new policies and sought steep rate hikes as they grappled with financial losses. In addition, thousands of policies are pouring into the state-backed Citizens Property Insurance Corp. each week, which was set up as an insurer of last resort but had more than 850,000 customers at the end of April.
Murray on Tuesday called Citizens a “barometer” of the health of the property insurance market.
It remains unclear when regulators will decide whether or not to approve the rate increases sought by Kin, First Floridian and the Farm Bureau companies. Each received a rate increase last year of at least 14 percent.
It was also unclear on Tuesday what steps lawmakers would take to try to strengthen the system. But it’s clear that the problems are hurting owners’ wallets: Farm Bureau said, for example, that its proposed rate hikes would lead to customers paying an average of $1,032 more per year.