April 18, 2024

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Raising interest rates 50%?  Clients of these insurance companies in Florida may face higher premiums

Raising interest rates 50%? Clients of these insurance companies in Florida may face higher premiums

TAMPA, Fla. (WFLA) – Two Florida insurance companies are looking to raise their rates by more than 50%.

Castle Key Indemnity, owned by Allstate, covers condo owners. The company suggested that its rate would jump by 53.5% for customers.

Amica Mutual Insurance, which covers properties such as vacation homes, suggested a 54.1% increase.

“Frequent severe weather, high repair costs and higher reinsurance premiums have caused rates to rise in many states, including Florida,” an Allstate spokesperson said in a statement.

Allstate said the Castle Key rate increase was submitted to the Florida Office of Insurance Regulation nearly a year ago and began rolling it out to customers in May 2023. The company said this is not a new proposal to increase apartment rates.

In a statement regarding Castle Key's increase, a company spokesperson said: “The cost of providing reliable protection for Florida properties has risen significantly, and we are taking action to ensure we can protect customers for the long term.”

Castle Key only writes policies for about 150,000 Florida homeowners, said Mark Friedlander, spokesman for the Insurance Information Institute of Florida.

Friedlander said some of the increase in costs is due to the tragedy that occurred in Surfside with the collapse of an apartment there. However, he said the insurance situation is improving in Florida.

“In fact, seven new companies were approved to write new business in 2024 and that is an amazing result for the Legislature because for many years, companies have been withdrawing from Florida,” he said.

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“You can now start purchasing your coverage and get competitive quotes,” he said. “So, if you see a significant increase, regardless of what type of property insurance you have, it may be time to call your agent.”

Former state Sen. Jeff Brands said three main factors are driving up the cost of homeowners insurance in Florida.

“Litigation was the driver, and it was really driving up the cost,” Brands said. “The challenge we have now is that inflation is there and inflation was not a major issue two or three years ago. It is certainly a major issue today, and reinsurance rates have continued to rise across the country.

Brands said the Legislature needs to do more to improve Florida's homeowners insurance situation.

“I think there are solutions out there,” he added. “I think the Legislature needs to come up with a long-term strategy for how to handle property insurance in the state. And so far they haven't done that.”