The state Office of Insurance Regulation green lighted the hikes, suggesting a struggling sector.
The Florida Office of Insurance Regulation has given its approval to almost 100 property insurance rate increases across the state. This indicates that the industry conditions in the state have reached a difficult point.
The approvals were issued to dozens of homeowners and business insurers that filed for the hikes.
According to a report published by News 6 WKMG, dozens of property insurers filed court documents with the intention of obtaining approval for insurance rate increases from January through September last year. Nearly 100 of those applications received approval from the state Office of Insurance Regulation.
Among those approved by the state regulator, it was not uncommon for the rate hikes to be in the double digits. Industry experts have been cautioning about this trend since earlier in 2020. That there were so many filings and so many approvals for the increase suggests that the industry in Florida is going through an extremely difficult phase.
The insurance rate increases are a reflection of the complexity and challenges of coverage in the state.
“Florida’s insurance market is one of the most complex in the world,” said Karen Roach, spokesperson for the Florida Office of Insurance Regulation in an email statement cited in the report. “The property market is facing significant challenges, as the frequency of claims increases and those claims become more expensive.”
According to Roach, the challenges could also be primarily explained due to issues such as higher catastrophe claim losses resulting from a number of substantial hurricane events in recent years, a rise in litigation, and increasing costs for reinsurance coverage.
That said, even with the rising rates, insurance companies in the state are still losing money, said Paul Handerhan, president of the Federal Association of Insurance Reform (FAIR).
“The vast majority of the insurers who are writing homeowners’ insurance in the state of Florida, have been posting underwriting losses for the last five years,” Handerhan explained. He also pointed out that even following the insurance rate increases, property insurers in Florida are “definitely in a tenuous financial position right now.”