Homeowners, workers’ comp rate decrease
More than half of August’s Hurricane Debby claims are now closed, the largest homeowners insurance rate decrease of the year has been filed, what some Florida insurance agents are now hearing from their customers, a new report says Citizens Property Insurance isn’t collecting adequate premiums, plus the less than usual workers’ compensation insurance rate decrease request. It’s all in this week’s Property Insurance News.
Flooding in the Laurel Meadows neighborhood of Sarasota from Hurricane Debby, August 5, 2024. Courtesy, WTVT-TV Fox 13 Tampa
Hurricane Debby Losses: As of this past Friday, reported insurance losses from Hurricane Debby are now just under $121 million on a total of 19,302 claims filed. Of those, about 12,000 are residential and another 6,000 are in other lines of business, which include automobile claims, of which there were many due to the storm’s heavy flooding. Nearly 52% of claims have been closed now with almost 55% closed without payment. This is not surprising, given that Debby was a rain/flood event, as most homeowners policies don’t cover ground flooding. Florida insurance regulators have extended the weekly Friday noon data calls on Debby claims through the last Friday in September.
More Rate Decreases: American Integrity Insurance has joined the growing list of Florida insurance companies filing homeowners rate decreases. The company has filed a proposed 6.9% decrease, the largest filed among the 12 companies filing rate decreases so far this year. 24 other companies have filed zero percent rate changes, a sign of Florida’s strengthening property insurance market. In a television interview with Tampa’s WFTS-TV ABC Action News, American Integrity’s CEO Bob Ritchie said rate decreases will become more the rule than the exception for the rest of their customers. We commend him for his leadership in addressing the issue head-on with the news media and salute Florida’s insurance leaders who are delivering lower rates in the wake of recent legislative reforms.
What Agents Are Saying: Those homeowners rate decreases were among the topics we discussed last week on the latest edition of The Florida Insurance Roundup podcast. My guests were Jay Wolfberg, President of We Insure, Ana Regina Myrrha, Agency Principal and Broker at American Insurance Point, and Paul Lalonde, President of Insurance Wagon. These three passionate insurance agents also shared what they’re seeing with expanded coverage options, the challenges facing condominiums, rising automobile insurance rates, growing acceptance of telematics, the growing need for flood insurance, and the reinsurance costs that carriers pass along to consumers. We also discussed the role of the news media in educating the public about insurance and how agents can help the media do so. The episode underscores the importance of transparency and proactive communication in the industry. Read more/Listen here.
Citizens Insurance Audit: A report by the Florida Auditor General is recommending improvements in state-backed Citizens Property Insurance Corporation’s underwriting and policy eligibility controls, while pointing out the carrier is not collecting adequate premiums. The report found that of the 3.33 million non-commercial policies issued or renewed between January 2021 and August 2023, 1,820 exceeded the $700,000 statutory replacement cost policy limit. Citizens responded to that finding, noting that its system that automatically detects and stops such transactions was inadvertently disabled for part of 2023. The report also found that Citizens premiums collected from 2021-2023 were $2.8 billion less than what would have been collected using actuarially-sound rates. To fix that – and avoid future surcharges on Citizens and non-Citizens policyholders alike – the report recommends the Florida Legislature revisit the statutory glide-path rate increase cap, as well as allow Citizens to include anticipated reinsurance costs to cover a 100-year maximum loss in its rates. The report was before Citizens’ revisions to the clearinghouse in the past several months. The clearinghouse is a marvelous tool to keep policies out of Citizens and preventing exactly what the report cites.
Workers’ Compensation Rate Decrease: The National Council on Compensation Insurance (NCCI) which files workers’ comp insurance rates on behalf of carriers serving Florida, has filed a 1% rate decrease request with state regulators. NCCI cited stable medical costs and decreasing claims frequency in its request. If approved, it would be the eighth consecutive yearly decline, following last year’s 15.1% decrease. NCCI reports the decrease would have been 6.4% if not for passage of SB 362 earlier this year by the Florida Legislature. That measure increased the maximum workers’ comp reimbursements for physicians. The new rate, pending review, will take effect January 1, 2025.
LMA Newsletter of 9-3-24
