1st new insurance company moves into Florida as rates continue to climb
In early April the Florida Office of Insurance Regulation approved a new company to begin issuing policies in the state, the first company to enter the state since lawmakers held two special sessions and set aside $3 billion for reinsurance.
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HCI Group filed with the state to start issuing policies under with anew company called Tailrow, This represents the first company to come into the state since Florida closed off many avenues of insurance litigation in an effort to attract more companies and shore up a failing market.
READ: It keeps getting worse: Florida property insurance rates set to jump up to 60%
“Our hope is that with the implementation of the recent legislative changes that we hope will have a positive impact on the homeowner’s insurance industry overall -- that that will make it more attractive for other insurance companies to come into our states,” says Tasha Carter, of the Department of Financial Services. “Which, of course, would create more competition, more accessibility, and hopefully also aid in helping to reduce rates and make homeowners insurance more affordable as well.”
Even with the new company moving in, rates for homeowners continue to climb.
READ: Florida’s Citizens Insurance proposes 14-percent rate increase
In the last month four companies have requested double-digit rate increases of up to 61.5% with the state-backed Citizen’s Property Insurance requesting a 14.2% increase.
“We may not see a reduction in rates for about 18 to 24 months. And for consumers, that’s just a long time to wait for financial relief. Insurance companies are continuing to file rate increase request with the Office of Insurance Regulation, and they are continuing to increase their rates by double digits and for some companies, triple digits,” says Carter. “And so, with the increase in reinsurance rates, insurance companies are having to pay more for their reinsurance insurance, and they’re passing those additional costs on to their policyholders as well. So, unfortunately, I think it’s going to be closer to the 18-to-24-month timeframe before we’re able to really see any significant reduction in rates.”
Right now, lawmakers are considering an additional piece of legislation to increase oversight on insurance companies. However, experts caution it will do little to change the trajectory of the market over the next year, warning rates will continue to climb and could get much worse if the state gets hit during hurricane season.
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