Florida Homeowners Market ‘More Competitive,’ McCarty Finds

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Homeowner insurance rates are finally coming down in Florida nearly a decade after the last hurricane hit, the state’s insurance commissioner says.

But the report by Insurance Commissioner Kevin McCarty also showed that some of the state’s larger insurers have received approval for rate hikes. The report also did not include the state-created Citizens Property Insurance, which has been raising its rates for several years.

The report was done at the urging of Chief Financial Officer Jeff Atwater, who wanted to know why homeowner rates have not come down even though their cost of reinsurance has been coming down.

McCarty’s report said that the overall trends show rates going down and that the market is “more robust and competitive” than previously. “There is reason to be optimistic that the Florida homeowners market is steadily improving,” McCarty wrote.

McCarty’s report is only partially complete: Data was provided by only half of 30 insurance companies that represent 70 percent of the insurance market. However, among the 15 insurers providing data, six had filed for rate decreases ranging from 2.4 percent to 9.2 percent.

Also, two of the state’s larger insurers, State Farm Florida and Castle Key, have either asked for or received approval for rate hikes.

The report also did not include Citizens, which is about 20 percent of the market.

The report also said many insurers were seeing declines in their reinsurance costs. Rising reinsurance costs have been blamed for past price spikes.

McCarty noted that while reinsurance is a “significant factor,” other factors could also impact rates and a “10 percent decrease in reinsurance costs does not translate into a 10 percent decrease in total rates.”

Atwater said that insurers should pass on savings. “The commissioner made it clear, barring any catastrophic event, he has every expectation that these lower reinsurance costs will be reflected in lower rates for consumers in future rate filings,” Atwater said.