Allstate, the second-largest home insurance provider in the United States according to the Insurance Information Institute (Triple-I), is known for its comprehensive coverage for homeowners across the country since 1931. However, two insurance companies, including one owned by Allstate, are currently seeking approval for significant premium increases exceeding 50% for homeowners in Florida.
Castle Key Indemnity Company Proposes a 53.5% Rate Increase
Castle Key Indemnity Company, an Allstate subsidiary that provides insurance for condominium owners, has proposed a substantial rate hike of 53.5%. An Allstate spokesperson confirmed to WESH 2 that this increase was lodged with the Florida Office of Insurance Regulation in 2023, and most customers have already been affected by it.
Amica Mutual Insurance Tables a 54.1% Premium Increase Proposal
Similarly, Amica Mutual Insurance, which insures properties such as holiday homes, has tabled a proposal for a 54.1% increase. The Florida Office of Insurance Regulation will conduct hearings next week to determine whether these rate requests will be approved.
Severe Weather Events Driving Up Costs, Says Insurance Information Institute Spokesperson
Mark Friedlander, the Florida spokesperson for the Insurance Information Institute, attributes the rising costs to more frequent severe weather events. “The more storm losses we see, the higher premiums are going to go,” Friedlander said. He added that it’s not just hurricanes contributing to these costs, but also tornado outbreaks during the winter season.
While other insurers might also consider rate increases, Friedlander noted that last year, many were seeking hikes above 100%, which makes the current proposals seem comparatively moderate.
New Insurers to Enter Florida Market in 2024, Potentially Leading to Better Pricing Options for Homeowners
However, there is a silver lining for homeowners. “Seven new insurers companies have been approved to write homeowners’ policies in Florida in 2024. And this is the first time in many years we’ve seen a large volume of new insurers want to come into the Florida market,” Friedlander said. This could lead to more options for consumers, potentially leading to better pricing.
New Florida Insurance Companies
In a recent turn of events, a handful of insurance companies have received authorization to extend their services to homeowners in the Sunshine State. Among them is Tailrow Insurance Company, an affiliate of HCI Group, which was sanctioned by the Florida Office of Insurance Regulation (OIR) to deal in multi-peril homeowners insurance last April. This approval was a direct outcome of legislative modifications aimed at tackling the issues plaguing Florida’s property and casualty insurance sector.
Another company that made the cut is Mainsail Insurance Company. This newly minted firm, falling under the umbrella of Spinnaker Insurance Company (a Hippo Holdings Inc. entity), got the nod in August of the previous year to provide a wide array of 17 insurance coverages in Florida, comprising auto, commercial, and property insurance.
The list also includes Orion180 and its counterpart, Orion180 Select, who were given the go-ahead to dispense property and casualty insurance policies in Florida in August. Orion180 initially forayed into the market with wind-only products for residential properties towards the close of last year, with a primary focus on residences with a replacement cost north of $700,000. The company has plans to possibly roll out a comprehensive homeowners product in Florida come 2024.
Finally, Orange Insurance Exchange also made it to the list, having been approved to provide property and casualty insurance coverage in Florida last October. The company hit the ground running in December, operating with a surplus of $25 million. The organization is overseen by former associates of Tower Hill Insurance Group, Donald Matz and Michael McNitt, who were previously at the helm of Cabrillo Coastal.
When asked about Castle Key’s proposed rate increase, an Allstate spokesperson stated: “The cost of providing reliable protection for Florida homeowners has risen dramatically, and we’re taking actions to ensure we can protect customers over the long haul. We’re committed to the state of Florida and confident recent insurance reforms will address longstanding challenges in the state.” As of now, WESH 2 is still awaiting a response from Amica regarding their proposed rate increase.
