Allstate’s Castle Key Insurers Seek 18-33% Rate Hikes in Florida

Allstate Insurance subsidiaries in Florida are seeking rate increases from 18 percent to 33 percent.

Castle Key Insurance Co. has filed with the Florida Office of Insurance Regulation (OIR) to increase homeowners rates by an average of 33 percent. Castle Key Indemnity has filed for an average increase of 18 percent.

The insurers have requested the rate increases “based the continued costs of reinsurance and increasing costs associated with paying homeowners claims,” according to Amy Moore, company spokesperson.

Moore said Castle Key has not received a “significant” rate increase in nearly five years. “We need to maintain adequate capital to remain strong and positioned to deliver on our promise to customers. Losses and expenses have exceeded premium and this is projected to continue without a rate increase,” she said.

If approved, the average annual change for Castle Key Insurance Co. policyholders would be approximately $412 a year or $34 per month. The average annual change for Castle Key Indemnity policyholders would be approximately $243 a year or $20 per month.

Castle Key Insurance companies currently write approximately 250,000 policies. New Florida home insurance business is going into Castle Key Indemnity, which accounts for approximately 27 percent of the insurer’s homeowner policies.

Florida law requires a public hearing for homeowners rate filings for 15 percent or more. The OIR hearing on the Castle Key filings is scheduled for July 27.

The Florida companies of Allstate have been writing new homeowners and renters business since early this year. In April, the insurer said that Castle Key subsidiaries planned to write about 50,000 new multi-line policies by next year, with some of that take-out policies form the state-backed Citizens Property Insurance.

Allstate changed the names of its Florida subsidiaries to Castle Key in July 2009. The insurer said the name changes were made in order to “better reflect the fact that these property companies are separately capitalized from Allstate Insurance Co.” The company has about 1,000 exclusive agents in the state.

Florida Insurance Commissioner Kevin McCarty has battled Allstate over rate increases and regulatory proceedings in the past. In August, 2008 the two signed an agreement that included a $5 million fine to resolve issues stemming from Allstate’s September 2007 rate filing.

In the 2008 settlement, Allstate also agreed to lower its homeowners insurance rates by 5.6 percent, which was in addition to a 14.2 percent reduction that took effect June 1, 2007, and to write 100,000 new homeowners insurance policies over the next three years.

Topics Florida Carriers Pricing Trends Homeowners