Nationwide to raise rates 71%
sptimes.com
Another insurer asks for huge hike
Nationwide, which already has stopped writing new policies in Florida, wants to raise its rates 71.4 percent in anticipation of hurricanes.
By WILLIAM R. LEVESQUE, Times Staff Writer
Published July 6, 2006
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Nationwide Insurance Co.'s Florida unit is asking state regulators today for an average 71.4-percent rate hike for homeowners coverage, joining a flood of insurers seeking double-digit increases in the face of an expected busy hurricane season.
The request, if approved by the Florida Office of Insurance Regulation, would be effective Nov. 10. Public hearings, which are required on all rate hikes of more than 15 percent, will be scheduled.
The rate increase would affect all of Nationwide's 240,000 Florida policyholders and comes on the heels of a 21 percent average rate hike last July. Last August, Nationwide said it wouldn't renew 25,000 homeowners policies and 4,800 mobile home policies. It has stopped writing new policies in Florida.
"When you get right down to brass tacks, just as every individual needs to be ready for hurricane season, insurance companies have to be ready, too," said Joe Case, a spokesman for Nationwide, which is based in Columbus, Ohio. "The request reflects the true cost of doing business in Florida, where the threat of hurricanes is very real."
Among other major insurers in Florida, State Farm sought a 70 percent increase in May and Allstate won approval in February for rate increases of up to 50 percent.
Nationwide's latest rate request ranges from an average 2 percent rise in parts of Flagler County to as much as 99 percent in parts of Palm Beach County.
Case said labor and building material costs have increased, as has the cost of reinsurance, which is coverage that insurance companies buy to limit their risk.
"This is not about recouping past losses," Jeff Rommel, regional vice president of Nationwide's Florida operations, said in a statement.
Florida Insurance Commissioner Kevin McCarty said he is "extremely concerned" about the request and that it would have to be justified.
"Many of our state's residents have already experienced difficulty paying higher insurance premiums due to the dramatically higher rates charged by global reinsurers," McCarty said.
Many insurers are either seeking permission to raise rates or dumping policies written in Florida, driving many policyholders to Citizens Property Insurance, the state-run insurer of last resort. |
